Helpful Hints

Under-Insurance: The hidden danger for homeowners

Under-insurance can be a problem for many Australians.  If you’re a keen renovator, consider how your home improvements can affect the value of your home and its contents.  

What is under-insurance?

Under-insurance is having insufficient insurance to cover the value of something. You may have under-estimated the cost of rebuilding your home and replacing the contents, or perhaps you’ve overlooked some items in your home completely. In 2005 the Australian Securities and Investments Commission (ASIC) estimated that a staggering 70% of Australian homes were underinsured.

Source: Insurance Council Australia

Are you under-insured?

If you don’t keep your insurance cover up-to-date, you could find that your home and contents are under-insured. For example, a TV you bought fifteen years ago may have cost $200 but the cost to replace it today is $450. If you’ve insured it for only $200 and it’s destroyed or stolen, that leaves you out of pocket by $250.

Are YOU facing the under-insurance trap?

Don't wait to find out! Get peace of mind right away by calling us on 133 QBE (133 723).

Tips to avoid being under-insured

1. Use our Home Building Calculator and Home Contents Calculator to help you assess the value of your home and its contents.
2. Estimate the value of each item in terms of what it would cost you to replace today, NOT what you paid for it, and include this in your inventory.
3. If you have receipts for big ticket items, keep those with your list.
4. Write down any serial numbers or identifying elements and take photos of more unusual items such as paintings or jewellery.
5. Expensive jewellery items should be valued by a jeweller and re-valued every three to four years.
6. High risk items such as bicycles, jewellery, electrical items (e.g. home theatre entertainment systems and computers) and anything unusual such as musical instruments should all be specifically mentioned when finalising your policy so you are confident they are fully covered.
7. Some items may be better insured under a valuables policy rather than a contents policy. Discuss this with your insurer.
   

How to avoid under-insurance

Every time you receive your insurance renewal, re-evaluate your home and contents. What did you buy this year? How did you improve your home? Carefully consider the replacement cost of your home and everything in it. If you find you are under-insured, top up your insurance to cover the full amount. Do this every year and you’ll have peace of mind, knowing that you are completely covered.

And to protect your car, don't forget to:

•  Check your car is properly covered and the insurance policy is current.
•  Report any accidents to your insurance company immediately.
•  Lock vehicles and ensure personal belongings are not exposed.