Home Building and Contents Insurance

For the building you would normally insure it for the purchase price, but if it is some time since you purchased the property, it may be a good idea to get it valued. A mortgage or insurer broker may be able to assist you with valuation. A block of units is insured by the body corporate, but individual unit owners should check if the policy is adequate.

For contents you need to sit down with pen and paper or at your computer and work out the value of your assets. Do not forget to include clothes, books, CDs, DVDs, all kitchen belongings, and all electrical equipment. Then try to think of anything you have forgotten.

Before applying for insurance it is good idea to have keyed deadlocks on your front and back doors and on all accessible windows. This can reduce your premiums, as well as lessening the chance of your belongings being stolen.

There are many insurance companies with a variety of products, so speak to your broker who can give you a range of options. You want a policy that includes personal liability insurance to provide cover for when a visitor is injured in your home. For more information on insurance products go to http://www.creditworldaustralia.com.

As well as cover for theft, you are usually covered for fire, storm and rain damage, and accidental breakage of glass in windows and door. You can pay extra for optional cover including flood damage, motor burnout and injury to pet dogs and cats. Some special items such as jewellery may not be fully covered, and you can pay extra to fully insure these. Check carefully what is covered as this varies.

Premiums are calculated on the total amount insured. Payment is usually annual, but many insurers offer monthly payments, although there is often a monthly administration fee of around $3.50. In NSW and Victoria there is a 22% Fire Levy. All state governments levy stamp duty on all home insurance; check with the appropriate authority for the percentage. GST applies to all insurance products. All this can make premiums costly, so you should make sure you are neither over-insuring nor under-insuring.

If you employ any domestic workers such as cleaners or gardeners, you should check that they are insured. If they are not, you should find out if your home and contents policy includes domestic workers’ compensation. If it does not it is advisable to take this out to cover any injuries that may happen to your domestic workers in your home and garden.

Once you have made your insurance application, the insurer needs to assess the risk of insuring your home and contents. You have a duty of disclosure to inform them of any relevant factors to this assessment. Failure to disclose relevant information can result in claims being refused.

Summary

• Homeowners should have building insurance.
• You need contents insurance whether you are an owner or a tenant.
• You should carefully work out the value of your assets to avoid over or under-insuring.
• Talk to your insurance broker about a range of insurance products.
• Read your policy carefully, so you know what is and is not covered.
• Remember to disclose any relevant information in your insurance application.
  

Article correct at its author date: Jan 2007. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

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