A common question we get as Insurance Brokers when chatting to clients about their domestic properties during the quote process is …
“How much do you think I should make my building/contents sum insured?”
Whilst we will do the best we can to find you the most suitable and competitive covers - we can’t tell you what to set your sum insureds at. What we will do however, is guide and advise you on the things you need to consider when you do calculate the value of your property for your insurance cover.
When you are calculating the sum insured on your Building Insurance there are more things to account for than just the actual house structure itself. Some additional items that you need to typically include when setting your building sum insured are:
- Any additional structures such as garages, carports, sheds and patios
- Items that are built-in such as in ground swimming pools and water tanks
- Items that are fixed to the building such as awnings fitted externally
- Fixed wall and floor coverings **
- Ducted Air Conditioning
- Fences, gates and retaining walls
- Decks and pergolas
The same question arises with Contents Insurance – there are so many variables from one household to the next such as:
· How big is the house? How many rooms are there?
· How many people live in the property?
· Is your property furnished with high value designer items?
· Do you have collections such as stamps, art etc
I find that clients often initially suggest a fairly 'light' value on their contents insurance. Once I ask a few extra questions the insured will generally revise the original amount as there are items that they have not thought of when calculating the figure. It’s easy to look around at your furniture and large appliances and ballpark an amount but there are commonly overlooked items such as:
- Clothing & shoes
- Accessories such as handbags, sunglasses & jewellery
- Carpets, curtains and blinds**
- Linen & bedding
- Books & toys
- Kitchenware
- Ornaments, rugs and wall hangings
- Computers, gaming consoles, TV's, stereos and their accessories
- Pools and spas that are not permanently installed
- Tools and gardening equipment
- Recreational sporting equipment such as bicycles
** Carpets, curtains and internal blinds are generally considered contents so you should refer to your applicable PDS to clarify if you are uncertain
In the worst case scenario of a total loss such as a fire, your Home & Contents cover is designed to provide you with the ability to rebuild and restore your home, inside and out. A major claim is already a traumatic experience for anyone – don’t be faced with the possibility of your insurance policy not providing the full scope of cover in this crucial situation due to inadequate sums insured.
Don’t put it off, take a look around your home today – walk through room to room, open cupboards & drawers, look through the shed and garage. You will be surprised how quickly it all adds up and then compare against your current insurance policy and action any changes straight away.
Below are 2 incredibly helpful calculators that can assist with taking some of the guesswork out of the process of setting your sum insureds on not only your Building but also your Contents.
** Whilst there has been a great deal of research involved in the construction of these calculator tools, they along with the above information are to be used ONLY as a general guide and you need to be confident in the final sum insured nominated on your policy based on your individual circumstances and covers provided. The above does not take into consideration any sub-limits or restrictions contained within certain products offered in the market.
Of course if at any time you are unsure of any details in relation to your insurance program you should contact your Broker or Insurer for clarification.
Kate Koric
Director | Senior Broker
Credit:
Building Calculator – Cordell
Contents Calculator – Sum Insured Pty Ltd
Image - CGTrader.com