JOE VELLA NEWS
personal Insurance > Under-Insurance
What happens if I under-insure?
If you are under-insured, you might be in for an unpleasant surprise if you ever need to make a claim. Most home and contents insurances will automatically increase your sums insured to include the “Consumer Price Index” (CPI), however sometimes this may increase the sum insured too much (and your policy price accordingly) or not enough. It is recommended that you check this every year to ensure they are adequate.
Common Home under-insurance traps
- Underestimating the reinstatement costs of buildings (not allowing for the increasing costs of rebuilding and the additional costs of new buildings, heritage issues, etc).
- Not allowing for architectural and engineering fees when setting the building sum insured(such advice may be required if the building needs to be rebuilt following a loss).
- Underestimating the replacement cost of expensive electrical equipment.
- Underestimating the costs associated with removing debris.
- Not reviewing sums insured and ensuring that they are up to date year after year.
Disclaimer
Typical building replacement costs are provided by Reed Business
Information Pty Ltd (ABN 80 132 719 861) trading as Reed Construction Data ('Reed') and typical building contents replacement costs are provided by Sum Insured Pty Ltd (ABN 55 947 630 521 ('SI') trading as Home Contents. Whilst every care is taken to ensure the accuracy of the information as a guide for costing, no responsibility is accepted by either Reed, SI, Steadfast or JVIB for its accuracy. Please check with an Architect, Builder, Quantity Surveyor, Valuer or other suitably qualified professional for an accurate estimate.
Neither Steadfast nor JVIB takes any responsibility for the costings provided by Reed or SI nor any liability for the accuracy of or reliance upon or use of, the costings. To the fullest extent permitted by law, Reed, SI, Steadfast and JVIB expressly disclaim all warranties, express or implied, including, but not limited to, the implied warranty of fitness for a particular purpose. Reed, SI, Steadfast and JVIB do not warrant or make any representations regarding the use or the results of the use of the information provided in terms of its correctness, accuracy, reliability, or otherwise."
