When did you last take stock of your Home and Contents Insurance?

Author: Steve Hollow, Head of General Insurance- Australian Unity

As you move toward or into retirement you might want to consider if your home and contents are adequately covered. After all, your home contains years of hard work and memories and could be the largest single asset you own. When you reach retirement, you no longer have the security net of a wage to protect you, should you suffer a loss without adequate protection.

Over the years, the sum insured on both your building and contents can become unrepresentative of the actual value to replace them. This can be due to alterations or additions to the property over time, that may not have been considered in terms of arriving at an adequate sum insured. Examples can include installing a pool or outdoor shed or less obvious things like replacing the fences or including retaining walls for garden beds. It all adds up. In terms of contents, you may accumulate a lot of possessions over time without considering the cost to replace all your contents should the worst happen.

What can you do?

In relation to your building insurance, there are several building calculators that are available on insurers’ websites however the outputs can vary so it’s worthwhile trying several to compare the results. A great place to start is the Insurance Council of Australia’s website which includes information on “understanding insurance” and has its own calculator that even considers the specific location of your property. Alternatively have a builder or valuer assess the cost to rebuild your house to the same specification. Whilst this may cost more upfront, it could save you in the long run, ensuring you have sufficient cover to properly repair or replace your home.

The “Understand Insurance Report” published by the Insurance Council of Australia in 2013, found that up to 83% of Australian homeowners and renters were underinsured. On those results alone, many people could fall into the “underinsured” category.1

For estimating your contents, use a calculator and go room by room to do a stock take. You may be surprised at the value of the contents you own when applying the replacement value to the things you have accumulated over a life time. Jewellery and other valuable items including works of art, expensive rugs or so forth, should be given particular consideration. These items often have limits written into the policy capping the payout amount unless you specify them. It may not be the most exciting reading to do in retirement, but an hour reading your Product Disclosure Statement (PDS) for these limits could save you a lot of heartache in the event of a loss. Alternatively give your insurer a call and ask the consultant to explain them to you.

Travel is usually high on many retirees’ priority lists (well as soon as we have COVID-19 under control) and it’s important to plan for the security of your home and its contents while you are away. There are numerous ways to secure your home, varying in levels of complexity and expense. One of the simplest and cheapest security measures is to have someone house sit for you, or having lights and TVs attached to timers, coming on for a few hours each evening. More robust measures include installing deadbolts to all external doors and windows as well as installing local or monitored alarms.  Don’t forget the value of community and befriending your neighbours so that you can watch out for each other.

If you are planning to be away and the property will be vacant for an extended period, it is important to contact your insurer as many policies have “un-occupancy clauses” that restrict cover. Most start at two months vacancy but please check your Product Disclosure Statement.

A small investment of time and effort now can provide reassurance that your most significant asset is adequately insured going forward.

Important information

Australian Unity Bank Limited, ABN 30 087 652 079 AFSL No 237994 is authorised to refer you online to the insurer Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL No 234708 (Allianz) and to arrange this insurance over the phone and provide you with general advice on this insurance as agent for Allianz. We do not provide any advice based on any consideration of your objectives, financial situation or needs. Therefore, you should consider whether the advice is suitable for you and your personal circumstances. Terms, conditions, limits and exclusions apply. Before making a decision, please consider the Product Disclosure Statements and Key Facts Sheets at the foot of www.australianunity.com.au/insurance.

If you purchase this insurance, we will receive a commission that is a percentage of the premium up to 20%. Ask us for more details before we provide you with services. It’s important that you read our Financial Services Guide before acting on any advice or taking out insurance through us. You can download the Australian Unity Bank Limited FSG

This is a publication of Australian Unity Personal Financial Services Limited ABN 26 098 725 145 (AUPFS), AFSL 234459. Its contents are current to the date of publication only, and whilst all care has been taken in its preparation, AUPFS accepts no liability for errors or omissions. This report is general in nature and does not take into account the objectives or circumstances of any particular individual or entity. It cannot be relied upon as a substitute for personal financial, taxation or legal advice.

  1. Source: http://understandinsurance.com.au/choosing-the-right-policy

Dennis Souksamlane and Defined Financial Advice Pty Ltd are Authorised Representatives of Personal Financial Services Limited (ABN 26 098 725 145), AFS Licence no. 234459. The information provided on this website is general in nature. Any advice on this website is general advice only and does not take into account the objectives, financial situation or needs of any particular person. It does not represent legal, tax, or personal advice and should not be relied on as such. You should obtain financial advice relevant to your circumstances before making investment decisions. Personal Financial Services Limited is a registered tax (financial) adviser and any reference to tax advice contained in on this website is incidental to the general financial advice it may contain. You should seek specialist advice from a tax professional to confirm the impact of this advice on your overall tax position. Nothing on this website represents an offer or solicitation in relation to securities or investments in any jurisdiction. Where a particular financial product is mentioned, you should consider the Product Disclosure Statement before making any decisions in relation to the product and we make no guarantees regarding future performance or in relation to any particular outcome. Whilst every care has been taken in the preparation of this information, it may not remain current after the date of publication and Personal Financial Services Limited and its related bodies corporate make no representation as to its accuracy or completeness.

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