Here’s how to make sense of Home Insurance ‘add ons’

So you’re thinking about reviewing your home and contents insurance and you’ve stumbled upon the mysterious world of optional extras. 

They're the insurance equivalent of the McDonalds upsell: "Do you want fries with that?"

Many providers offer these as additions to the standard cover, but they can be confusing and can make getting a quote and comparing it to other policies more difficult.

So what are they, do you really need them and are they worth the extra cost?

Let’s answer part 1 first.

What are they?

Optional extras (also known as ‘add ons’ or ‘upsells’) are things not included in your initial coverage. In fact, some policies don’t offer full cover, but instead provide a basic level of cover and the opportunity to take up add ons. These can include burnout of electric motors, accidental damage, even public liability if you’re in the building game.

Do you need them?

Only you can answer this question as everyone’s needs and financial situations are different. However, depending on your circumstances, it might be beneficial to take up a few extras if you really need them and the price is right.

So before selecting the upsells offered by your provider, you need to think long and hard about who is benefiting the most from the transaction. Is it you?

Here is a list of six popular add-ons and what they cover:

Flood cover – is defined as the covering of normally dry land by water that has escaped or been released from lakes rivers, creeks or other natural watercourse. If you need flood cover, make sure you take up a policy that includes it, or buy it as an add on.

Personal possessions – this covers those everyday valuable items such as mobile devices and jewellery. They might already be covered by your contents policy in the home, but in some cases, these high valued items can be covered when you’re away from the home as an add on.

Accidental damage – a popular extra for those with young kids or grandkids. Most policies only cover damage from so-called insurance events, such as fire, explosion, theft or malicious damage. But most policies will not cover accidental loss or damage, except as an add on.

Home emergency – entitles you to have an on-call tradesperson come to your rescue and fix that leaky shower pipe or blocked toilet.

Personal money – If you keep a lot of cash or credit cards and you lose them on your travels or around the house, you are covered.

Legal expenses – can offset any legal costs in the event of a lawsuit with a dodgy tradie or builder. We’ve all encountered one of those at one time or another.

Visit the ASIC website here for more info on Home & Contents extras 

SPECIAL OFFER FOR FIFTYUPS:

As a valued FiftyUp Club member you can take advantage of the current members only offer on Home & Contents Insurance with 2017 Canstar award winner Budget Direct.

Switch online NOW and get 30%^ off Home & Contents Insurance plus $50 cashback*.

Any advice contained in this article is general in nature, it does not take account of your individual circumstances or needs. If in doubt about your own circumstances and needs you should seek financial advice. 

Home Insurance Special Offer Disclaimer

This insurance product is issued by Auto & General Insurance Company Limited (ACN 111 586 353, AFS Licence No 285571) and administered by Auto & General Services Pty Limited (ACN 003 617 909, AFS Licence No 241411). Any advice provided is general only and may not be right for you. Before you purchase this product you should carefully read the Product Disclosure Statement (Part A and Part B) and Key Fact Sheets (Home Insurance and Contents Insurance) to decide if it is right for you.

^The discount amount varies by product: 30% discount on combined Budget Direct Smart Home & Contents Insurance, 15% for Smart Home only or Smart Contents only policies.

Discounts are for the first year only and apply to the standard premium offering for Budget Direct combined Smart Home & Contents Insurance, Smart Home only or Smart Contents only policies. Base rate premiums are subject to change.

Discounts are only valid for members who switch to Budget Direct Smart Home & Contents Insurance, Smart Home only or Smart Contents only policies online via budgetdirect.com.au. If you’d prefer to have someone talk you through the process, you can get a quote online with Budget Direct and then buy through Budget Direct's customer service centre and you’ll still get the same 15% or 30% discount.

*If you take up Budget Direct Smart Home & Contents Insurance, Smart Home only or Smart Contents only policies you are eligible to receive $50. The FiftyUp Club will pay by way of electronic funds transfer (EFT) $50 to eligible members after the first 3 months. To be eligible to receive the cashback you must complete a quote online and have current Budget Direct Smart Home & Contents Insurance, or a current Smart Home only or Smart Contents only policy. This offer is available to FiftyUp Club members only and cannot be used in conjunction with any other offer. Offer is for switchers only and excludes existing Budget Direct customers. If you take up the offer and you are not already a member of FiftyUp Club, you will become a member upon taking up the offer.

Cashback will be paid by EFT only, to the bank account nominated by you; no cheques will be sent to members. To receive payment as a new or existing member, you must provide and must ensure that your nominated bank account details are provided correctly to FiftyUp Club. You should do so here.

**If you cancel the policy within 21 days without making a claim, Budget Direct will give you a full refund.

FiftyUp Club Pty Ltd (ACN 166 905 175) is a Corporate Authorised Representative (AR number 465649) of One Big Switch Pty Ltd (ACN 150 963 474) who holds its own Australian Financial Services License (AFSL 455982) and can provide you with factual information and general advice only, that is advice that does not take into account your personal objectives, financial situation or needs.

If you take out a Home and Contents Insurance policy with Budget Direct as a result of the services provided by FiftyUp Club Pty Ltd, FiftyUp Club Pty Ltd will receive a commission of up to 20% of the premium for each member who takes up the Budget Direct member's offer. FiftyUp Club returns $50 of this commission to members in the form of the switcher's cashback. Further information can be found in the FiftyUp Club Financial Services Guide (FSG) available here.

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