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  • Avoiding home insurance blunders

    Avoiding home insurance blunders

    Author: David Wilson
    Date: October 10, 2007
    Publication: Sydney Morning Herald (subscribe)

    You know your home needs work when you see stalactites sprouting from the ceiling. Adrian Laing, a firefighter in Blackheath, made that discovery in July when he and his wife, Claire, returned late in the day from a trip to Sydney.

    After one of the coldest nights in Blackheath for a decade, the pipes had burst. By the time they arrived, 30,000 litres of water had been pumped through the ceiling, soaking the house.

    Adrian and Claire were shattered. Adding to the pressure, Claire was due to give birth.

    They slept in the garage. The next day, their insurance firm came to tidy up and wrote off most of their possessions, ranging from lounges to computers.

    Adrian estimates the total damage cost was $15,000. Happily, he is fully insured and is hoping his insurance firm will stump up for the lot, bar the $300 excess.

    Water, water everywhere

    UTS law student Jonathan Sankey, who lives in the eastern suburbs with his parents, also knows how it feels to be flooded. His drama happened in June when his neighbour dug a hole for a swimming pool, omitting to fit a drainage system.

    Cue torrential rain - enough to fill 20 Olympic swimming pools, Sankey estimates. The pressure on his garage wall made it implode. Like armour-piercing missiles, bricks shot out, drilling holes in three of the four cars in the family garage.

    All would be written off as the water and the cars rose to the ceiling. Adding to the Sankey family's agony, water burst through the adjoining wall of their house, flooding it and devastating his home office.

    The damages will run into millions. But Sankey is philosophical about the disaster.

    He says he and his family were fully insured. That saved them the hassle, expense and ugliness of suing their neighbour.

    The insurance firm sues on your behalf, he says. "The other benefit is that it gives you a liveable house. They hired this 24-year-old who worked from 6am to 11pm. Within three days the house was back to normal."

    That is, aside from subsidence. The house is sinking.

    But Sankey hopes all insurance will be paid for in time. The family has already received one big payout.

    Imagine if, like the Sankeys and Adrian and Claire, you suffered a catastrophe. You would not want to be underinsured. But plenty of people are.

    Too little, too late

    The Insurance Council estimates more than 1.8 million homes, or 23 per cent of Australian households, do not have any form of home or contents insurance. In NSW 656,000 homes - that's more than a quarter - do not have this insurance. Other households that do have cover are underinsured.

    You should regularly check that the level of insurance you have is the right amount for you.

    "It is often only at times when disaster strikes that people realise they do not have the correct level of insurance and that they are underinsured," says Paul Giles,general manager communications at the Insurance Council of Australia.

    Commenting on whether it makes sense to buy building and contents cover from the same insurer, Giles says insurance is a personal, competitively priced business so it pays to shop around.

    But resist the temptation to be a skinflint, because the cheapest policy may not always be the best. It is vital to speak to your insurer to determine the right level of cover, he says.

    But working out how much to insure for in relation to contents insurance can be a thorny personal issue. Glancing around your home, you may register a splurge of belongings to which you can attach no price tags. Just how much is that DVD player you bought for a discount seven years ago worth?

    But you just have to make a conscious effort to evaluate what your possessions might be worth. Giles suggests you list the contents of every room and make an updated checklist of all assets in and around your home for policy renewal time.

    Honesty the best policy

    While you are about it, take a note of any serial numbers or identity marks for valuable items. For unusual items, take photographs or a video to help in their description when making a claim.

    If you do not have a compulsory smoke detector in place and make a building claim in the wake of a fire, insurers will still pay out if you have disclosed the lack. An industry insider who asked not to be named told The Sun-Herald: "If you do not disclose that you don't have them, you will have problems. It's all about honesty. It all comes back to you - insurance companies are not stupid. They're the smartest companies around."

    As for the big question of how much you pay, it is almost impossible to say. It depends on a slew of variables such as what your floor is made of, what the roof is made of, the crime rate and so on.

    If you have internet access, the easiest way to get a quote is to hop online and fill in a form. But remember to read the fine print. In 11 per cent of disputes with insurance companies, the type of loss was not covered by the policy, and in 63 per cent of disputes the insurer refused to pay because of an exception in the policy, says the Australian Securities and Investments Commission and Choice magazine. It's easy to slip through the net.

    Renovation insurance

    So you plan to make your home into a palace and make a killing on the property market?

    Well first you need to remember that renovation is not just an investment - beyond the inconvenience of dust and din, it also entails financial risk.

    Therefore take the time to determine what is and is not covered during renovation upheaval.

    "First and foremost it is important to contact your insurance provider before you begin," says Paul Giles, general manager communications at the Insurance Council of Australia. "If your renovations total more than what is stipulated in your current home and contents policy, it is important to work through the renovation details with your insurer to come to a solution while the renovations are being undertaken." With luck, any rise in your premium will be trifling.

    "It is also important to update your insurance policy once renovations are completed - underinsuring the value of your property and assets is a major concern to the Australian community," Giles says.

    Many insurance firms provide online calculators to advise the correct level of cover for your individual circumstances.

    The effort of a reassessment may be worth it. If there's a fire or flood and you are not fully covered, you will deeply regret your neglect - or even wish you had never succumbed to "reno fever" in the first place.

    Who to contact

    NRMA 132 132, www.nrma.com.au
    ALLIANZ 131 000 or allianz.com.au
    ING 1800 815 688 or www.ing.com.au/ing-insurance/home-insurance.asp
    GIO 131 010 or www.gio.com.au
    AAMI 132 244 or www.aami.com.au
    REAL INSURANCE 1300 301 618 or realinsurance.com.au
    SUNCORP 131 155 or www.suncorpmetway.com.au

    http://www.domain.com.au/Public/Arti...nce%20blunders
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    Originally posted by muppet View Post
    Avoiding home insurance blunders

    Author: David Wilson
    Date: October 10, 2007
    Publication: Sydney Morning Herald (subscribe)

    You know your home needs work when you see stalactites sprouting from the ceiling. Adrian Laing, a firefighter in Blackheath, made that discovery in July when he and his wife, Claire, returned late in the day from a trip to Sydney.

    After one of the coldest nights in Blackheath for a decade, the pipes had burst. By the time they arrived, 30,000 litres of water had been pumped through the ceiling, soaking the house.
    always nice to read on a NZ website something that happened 'local' and didn't get reported in our newspaper....
    Last edited by NESW; 11-10-2007, 11:29 AM. Reason: rolling eyes & confused smilies didn't work...
    S.

    Comment


    • #3
      Originally posted by muppet View Post
      Avoiding home insurance blunders

      Author: David Wilson
      Date: October 10, 2007
      Publication: Sydney Morning Herald (subscribe)

      You know your home needs work when you see stalactites sprouting from the ceiling. Adrian Laing, a firefighter in Blackheath, made that discovery in July when he and his wife, Claire, returned late in the day from a trip to Sydney.

      After one of the coldest nights in Blackheath for a decade, the pipes had burst. By the time they arrived, 30,000 litres of water had been pumped through the ceiling, soaking the house.

      Adrian and Claire were shattered. Adding to the pressure, Claire was due to give birth.

      They slept in the garage. The next day, their insurance firm came to tidy up and wrote off most of their possessions, ranging from lounges to computers.

      Adrian estimates the total damage cost was $15,000. Happily, he is fully insured and is hoping his insurance firm will stump up for the lot, bar the $300 excess.

      Water, water everywhere

      UTS law student Jonathan Sankey, who lives in the eastern suburbs with his parents, also knows how it feels to be flooded. His drama happened in June when his neighbour dug a hole for a swimming pool, omitting to fit a drainage system.

      Cue torrential rain - enough to fill 20 Olympic swimming pools, Sankey estimates. The pressure on his garage wall made it implode. Like armour-piercing missiles, bricks shot out, drilling holes in three of the four cars in the family garage.

      All would be written off as the water and the cars rose to the ceiling. Adding to the Sankey family's agony, water burst through the adjoining wall of their house, flooding it and devastating his home office.

      The damages will run into millions. But Sankey is philosophical about the disaster.

      He says he and his family were fully insured. That saved them the hassle, expense and ugliness of suing their neighbour.

      The insurance firm sues on your behalf, he says. "The other benefit is that it gives you a liveable house. They hired this 24-year-old who worked from 6am to 11pm. Within three days the house was back to normal."

      That is, aside from subsidence. The house is sinking.

      But Sankey hopes all insurance will be paid for in time. The family has already received one big payout.

      Imagine if, like the Sankeys and Adrian and Claire, you suffered a catastrophe. You would not want to be underinsured. But plenty of people are.

      Too little, too late

      The Insurance Council estimates more than 1.8 million homes, or 23 per cent of Australian households, do not have any form of home or contents insurance. In NSW 656,000 homes - that's more than a quarter - do not have this insurance. Other households that do have cover are underinsured.

      You should regularly check that the level of insurance you have is the right amount for you.

      "It is often only at times when disaster strikes that people realise they do not have the correct level of insurance and that they are underinsured," says Paul Giles,general manager communications at the Insurance Council of Australia.

      Commenting on whether it makes sense to buy building and contents cover from the same insurer, Giles says insurance is a personal, competitively priced business so it pays to shop around.

      But resist the temptation to be a skinflint, because the cheapest policy may not always be the best. It is vital to speak to your insurer to determine the right level of cover, he says.

      But working out how much to insure for in relation to contents insurance can be a thorny personal issue. Glancing around your home, you may register a splurge of belongings to which you can attach no price tags. Just how much is that DVD player you bought for a discount seven years ago worth?

      But you just have to make a conscious effort to evaluate what your possessions might be worth. Giles suggests you list the contents of every room and make an updated checklist of all assets in and around your home for policy renewal time.

      Honesty the best policy

      While you are about it, take a note of any serial numbers or identity marks for valuable items. For unusual items, take photographs or a video to help in their description when making a claim.

      If you do not have a compulsory smoke detector in place and make a building claim in the wake of a fire, insurers will still pay out if you have disclosed the lack. An industry insider who asked not to be named told The Sun-Herald: "If you do not disclose that you don't have them, you will have problems. It's all about honesty. It all comes back to you - insurance companies are not stupid. They're the smartest companies around."

      As for the big question of how much you pay, it is almost impossible to say. It depends on a slew of variables such as what your floor is made of, what the roof is made of, the crime rate and so on.

      If you have internet access, the easiest way to get a quote is to hop online and fill in a form. But remember to read the fine print. In 11 per cent of disputes with insurance companies, the type of loss was not covered by the policy, and in 63 per cent of disputes the insurer refused to pay because of an exception in the policy, says the Australian Securities and Investments Commission and Choice magazine. It's easy to slip through the net.

      Renovation insurance

      So you plan to make your home into a palace and make a killing on the property market?

      Well first you need to remember that renovation is not just an investment - beyond the inconvenience of dust and din, it also entails financial risk.

      Therefore take the time to determine what is and is not covered during renovation upheaval.

      "First and foremost it is important to contact your insurance provider before you begin," says Paul Giles, general manager communications at the Insurance Council of Australia. "If your renovations total more than what is stipulated in your current home and contents policy, it is important to work through the renovation details with your insurer to come to a solution while the renovations are being undertaken." With luck, any rise in your premium will be trifling.

      "It is also important to update your insurance policy once renovations are completed - underinsuring the value of your property and assets is a major concern to the Australian community," Giles says.

      Many insurance firms provide online calculators to advise the correct level of cover for your individual circumstances.

      The effort of a reassessment may be worth it. If there's a fire or flood and you are not fully covered, you will deeply regret your neglect - or even wish you had never succumbed to "reno fever" in the first place.

      Who to contact

      NRMA 132 132, www.nrma.com.au
      ALLIANZ 131 000 or allianz.com.au
      FIB 1800 815 688 or https://fundamentalinsurancebrokers....ome-insurance/
      GIO 131 010 or www.gio.com.au
      AAMI 132 244 or www.aami.com.au
      REAL INSURANCE 1300 301 618 or realinsurance.com.au
      SUNCORP 131 155 or www.suncorpmetway.com.au

      http://www.domain.com.au/Public/Arti...nce%20blunders
      Thats an alarming number of 1.8 million homes not insured, or underinsured. I always review my policies each year to make sure we are properly covered. Could think of nothing worse than to think your covered and then need to make a claim only to realize you were not sufficiently covered

      Comment


      • #4
        Hi Philip,

        You've replied to a discussion that's inactive as it's 13 years old.

        Maybe you have some more recent data to share on homes that are not or under-insured in Australia?

        cheers,

        Donna
        SEARCH PropertyTalk, About PropertyTalk

        BusinessBlogs - the best business articles are found here

        Comment

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