When It Comes To Home Insurance, Write Everything Down

When my home insurance policy recently came up for renewal I thought it a good time to check that I was adequately covered. It turns out I wasn't because I live in a high risk bush fire zone and changes in building standards and regulations mean that replacement homes must be built to better withstand natural disasters – which add to the rebuild cost. 

The average cost of rebuilding homes has increased over time and a typical four bedroom home in a high risk bushfire area (BAL code FZ) can cost more than $100,000 extra to rebuild owing to the new standards. (Source: Architect Nigel Bell)

In a recent article in News.com.au Mike Bartlett of Sum Insured quoted their in-house research as showing.... the cost of replacing a household’s contents is rising at its fastest rate in seven years, potentially leaving many Australians underinsured. 

The Insurance Council of Australia say an estimated 1.8 million Australian homes, or 23% have no building or contents insurance (Source) and 28% of all households and 67% of renters do not have contents insurance.

Sum Insured commercial director Mike Bartlett says the quantity of household goods owned is forecast to climb further. The cost to replace household goods climbed 3.3 per cent in the year to July, the highest growth since 2009, as Australians load up on technology and gadgets.

While the prices of some household items have been flat or falling in recent years, the quantities of several items owned has increased. For example, many households today have more phones, computers, camera equipment, footwear and clothing than they previously did.

Bartlett says it is easy to check that your contents match your cover. “Anybody who spends the time can do a reasonably good estimate on your home contents by going room to room,” he says.

Write down everything — your pantry and fridge might easily hold $1000 of stuff, and include pots, pans and cutlery.

Separate research by the Insurance Council of Australia’s understandinsurance.com.au initiative has found that more than two-thirds of people only guess the value of their home contents and 80 per cent believe they are underinsured.

“People are a bit blasé about it and just think about the stuff that might be stolen.” But it’s not just about stealing — it’s about fires and floods,” Bartlett says.