One in four Australians with home and/or contents insurance are underinsured which is surprising considering buying a property is one of the largest financial transactions people can make.
Buying a property can be one of the most valuable investments you will make in a lifetime, so it makes sense to take a moment or two to consider house and contents insurance and ensure your investment is adequately protected.
If you are borrowing money to fund your purchase, your lending institution will require you to have insurance on the property being purchased. (Insurance is required for the building structures, not the land itself). Although this is required at the time of settlement, it is wise to insure the property for full replacement value at the signing of the contract to protect your interest in it.
It is imperative to carefully consider the value of insurance required for the property and its contents. Features in the home, including carpets, floor coverings, curtains, kitchen appliances and air conditioners can all form part of contents insurance. Plus, outdoor features that would have to be rebuilt such as driveways, fencing and pergolas should also be considered in calculations.
You also need to consider the house type and how much this would cost to rebuild. For instance a stone villa would cost considerably more than a single brick home to rebuild. It is your responsibility to ensure that you are insured for an appropriate amount.
Existing homeowners should take a few moments to revise their insurance contracts to determine whether the insured amount would be adequate should the property need to be rebuilt and or contents replaced.
For further protection you may consider adding devices such as deadlocks and additional smoke detectors. This will reduce the risk of burglary and fire and potentially save you money on your premium.
You may find it helpful to speak to several different insurance agencies for advice on your needs. Home content insurance policies can vary substantially and it is important to select one to suit your needs.