Is your building insurance cover enough?
Home insurance premiums in Australia rose by 5.9% in 2021 which is the highest in the last seven years. Driven by rising insurance costs due to increased frequency of natural disasters in the country, the average home insurance premium in Australia is expected to continue to increase.
However, being underinsured can be more devastating financially than having no insurance at all.
Increased costs:
There are various factors contributing to increased costs of construction, but the most notable factors include:
- An increase in the cost of supplies like structural timber and metal products.
- A skill shortage in the construction industry. There are difficulties with importing skilled workers, meaning the cost of local labour is on the rise, particularly as the demand for renovations and tradespeople continues to rise.
How does this effect you?
In these times of rapidly rising home and construction costs, under insurance can quickly become a real threat to what are your most valuable assets. It’s important that homeowners keep track of their sum insured and annually check that it is sufficient should the worst occur.
Any tips for individuals wanting to minimize the impact of rising insurance costs?
There are a few things consumers can do:
- Ask your broker about the types of policies that offer different levels of cover. A Defined Events policy usually has a lower premium than an Accidental Damage policy, however the cover isn’t as comprehensive.
- Increase your excess. On most policies increasing your excess (how much you pay if you need to make a claim) will reduce your premium. Work with your broker to find a level you are comfortable with.
- Pay by Month. To avoid one large bill, arrange to pay the premiums monthly either directly with the insurer or via a third-party lender.
Provide Insurance can conduct a complete Home & Contents policy review including providing a report on the rebuild cost of your home based on today’s climate.