Choosing the right home and contents insurance involves more than simply valuing your assets and choosing the cheapest premium on offer. Insurers design different insurance products to suit a broad customer base so it is important to make sure that the cover you end up buying covers those inclusions that are important to you. Here’s some hints when shopping around for insurance.
- Know your limits – often insurance policies have a cap on the amount that valuable items are covered for. Items such as jewellery or DVDs may only be covered for a set amount such as $5,000. If you have specific assets worth more than the standard limits then a capped policy won’t replace them so you should consider insuring these items separately or run the risk of not being able to have them replaced in the event that a claim needs to be made.
- Going out of town? – Leaving your place vacated for an extended period of time may void your insurance policy. If you leave home for extended periods for work or vacation (usually more than two months), it may be worthwhile to check the maximum term that applies with your insurer as you may require extra cover. You may even have to pay a higher excess if you’ve been away on holidays for an extended period!
- Termite Damage – Damage from pests such as termites is usually not covered in your policy as insurance companies see pest control as the home-owners responsibility in the normal up-keep of the building and view termite damage as a preventable event.
- Flooding – Insurers are often quite restrictive on the type of flood damage they will cover so it is a very good idea to make sure you understand whether a policy covers flooding and how flooding has been defined. If you live in an area that has a history of flooding you might not be able to get flood cover but it’s still worth asking as there are some policies that may still cover flood damage. You might have to pay a bit extra for coverage.
- Work from home? – If you have a designated space for working from home, you will need to have a separate business insurance policy to cover you for any damages that may occur to your home office.
- Shop around – although we all live in the information age some people just can’t be bothered to do a little legwork when buying insurance cover. Shopping around allows you to not just to find the best price but also to learn about what’s on offer from insurers. If you’re willing to pay a higher excess, you can lower your premiums and some insurers have discounted premiums when you shop online. You can also find out about multi-policy discounts.
- Got Pets? – not all policies cover property damage done by pets so if you’ve got pets it’s important to find out if your insurer will replace that chewed up couch. Incidentally some insurers also offer pet insurance to their home and contents policyholders which may come in handy if your old dog needs a couple of knee replacements.
- Read the policy document – This might seem straight-forward enough but a lot of people wait until an event occurs before they decide to have a look through their insurance policy document and by then it’s too late if your policy doesn’t cover that particular event. If you are especially worried about a particular event have a browse through the policy document even before you take out the policy so you can have some peace of mind if that event does occur.