After the storm, tips from the insurance experts

I don’t usually start a conversation by talking about the weather, but how can I not after the unseasonal storms we’ve been having?

My bathroom and bedroom were flooded, but oddly, not as a result of a storm. The cistern cracked on the toilet sending water through the two rooms and down through the floor via light fittings.

Naturally, I rushed to check my insurance policy.

Fortunately, I am covered, but now face the dilemma of whether to wear the excess of $1000, or just pay for the repairs myself and preserve the policy.

But it prompted me to look at the Australian Securities and Investments Commission (ASIC) website called MoneySmart where they provide some sound messages you should consider so you can rest at ease during the festive season and beyond.

Here’s what you should do, according to ASIC:

“If you live in an area prone to natural disasters, home and contents insurance is essential. In the event of a natural disaster, the insurer will help pay for repairs and other expenses, making it easier for you to get back on your feet.

If your home has been damaged in a bushfire, storm, flood or cyclone, here are some things you should do:

• Contact your insurer to lodge a claim.
• Take photos before cleaning up and make a list of everything that has been damaged to assist your claim.
• Start cleaning up. Consider removing damaged possessions.
• Check with your insurer before authorising repairs or employing tradespeople as you may not be covered for unauthorised repairs.
• Do not use equipment or vehicles that may be damaged.

You should check your policy to make sure you are covered for disasters. Flood cover is not offered in all home and contents insurance policies. If you are covered for storms, floods, bushfires and flash floods make sure you understand the definition of each.

Do you know how much you are covered for? If your property is prone to particular events make sure you are specifically covered for it. Ensure your cover is enough, these days repairs can cost more than you think.

Remember, there’s a new definition for flood, ‘the covering of normally dry land by water that has escaped or been released from the normal confines of: any lake, river, creek or natural watercourse, whether or not altered or modified; any any reservoir, canal or dam’.

Lastly, beware the risk of under insurance.There have been many serious floods, fires, cyclones and storms in Australia over the past few years. Many people do not have enough insurance cover on their home.

And wherever you live, your home insurance needs to be enough to cover the cost of rebuilding your home.”

It sounds onerous, I know, but most insurance companies have online tools or web calculators to help estimate the cost of rebuilding.

Shop around. Get quotes from different insurers and ask lots of questions. I know to many of you that will sound like the new fangled way of saying make sure you read the fine print!

Until next week,

John