Home Contents Insurance !

The giant storm that hit Sydney on the Queens Birthday long weekend certainly brought home the value of having what you own covered by insurance.   The State Emergency Service was kept busy putting tarpaulins on roofs damaged by fallen trees and the sheer volume of falling rain overran rain gutters and entered many homes.  In Australia 10.9 million insurance policies covering home contents insurance are in force - and each year one in every fifteen policy holders makes a claim.

A surprising number of householders are uninsured.  In particular, those renting are much more likely to be uninsured than owners, who have both the building and the contents protected by insurance cover.  In many cases,  renters under value what they own and only find out their loss when they are forced to go to the Salvation Army or St Vinnies for help after a disaster.

It is important to fairly accurately assess the true value of what you are insuring when taking out a contents policy.   Many people simply make a wild guess and in most cases find they are under insured - and that can affect a claim payout.   You are required to fully insure your contents and should the insured value be just fifty percent of what is destroyed, the insurer is entitled to pay just fifty percent of your claim.

Most insurance policies offer " new for old " cover.  If your refrigerator is ten years old they are not insuring it for its second hand value, but replacing it with a brand new unit - and that may have increased in price over the years.   The wise would walk from room to room with a pad and pen and list its contents with a guess at the present replacement value in estimating the cover required.

It is also worth remembering that in the event of a claim you may get a visit from an " insurance assessor ".   These are very cluey people and they are adept at arriving at the true value of what has been damaged or destroyed - and they will reject enthusiastic over claims.

In a house fire situation, a claimant who insists that he has ten expensive suits of clothes in his wardrobe may find the loss assessor scratching around in the debris - looking for metal zippers.  Each suit would have a pair of trousers and therefore if there were ten in the wardrobe there would be the expectation that ten metal zippers would be recoverable.   If only two could be found, the claim would be adjusted accordingly.

A similar situation applies to claiming that cameras or electrical items were of an upmarket - and expensive - brand while in reality they were from the cheaper end of the product range.. The burnt out remaining shell contains serial numbers and identification which the insurance industry is adept at tracing.

Many uninsured people use the logic that they have lived for years without a fire or storm damage disaster - and insurance is a waste of money.   But that is the whole purpose of insurance.  Because the vast majority are not suffering damage and making a claim, the tiny minority that have the misfortune to suffer loss can get insurance cover at a mere fraction of what replacement would cost.

Even if those who deny global warming is caused by human activity are right, there does seem to be an increase in bush fire intensity and we do seem to be having some extreme storms in recent times.
The uninsured must get a pang of conscience when the television news runs a story of someone standing in the ruins of their home - with the comment that they were uninsured - and " have lost everything " !

That old maxim.  "  There - but for the Grace of God - go I "  comes to mind !