Learning the hard way - what happens when you're not properly insured?

Learning the hard way - what happens when you're not properly insured?

Learning the hard way – what happens when you’re not properly insured

Remember when we talked about the importance of having the right level of cover for your home? 

It’s easy to list all the things you need to do to get your level of cover right. But what actually happens when you’re under-insured and it all goes wrong?

Jacquelyn Wilson from Ando Insurance Group Limited notes that homes are often under-insured when it comes to natural disasters, including in areas that are prone to earthquakes, floods and other severe weather-related events. In one recent case, a policyholder lost their home in an accidental fire. The cost to rebuild their house was close to $1.1million and, luckily, they were fully insured. But it was a different story with their natural disaster insurance. Had their loss had been as a result of an earthquake, flood or storm, they would have only received their sum insured amount of $650,000, leaving them with a significant shortfall in their rebuild.

Jacquelyn says what many people don’t realise is that increasing the natural disaster sum insured would not result in a huge increase in premium. For the family above, increasing the sum insured to $1.1 million meant they paid an additional $192 – a small price to pay for peace of mind. 

For more information on calculating the correct sum insured for your home, talk to your broker.

General Advice Warning

The information provided is to be regarded as general advice. Whilst we may have collected risk information, your personal objectives, needs or financial situations were not taken into account when preparing this information. We recommend that you consider the suitability of this general advice, in respect of your objectives, financial situation and needs before acting on it. You should obtain and consider the relevant product disclosure statement before making any decision to purchase this financial product.

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