Weather related disasters in recent years including tsunamis, earthquakes and hurricanes, have made the need for comprehensive home contents insurance all too clear. Additionally, with approximately 40 burglaries occurring every hour in Australia, it just makes sense to have financial coverage in place should you become a victim of home theft or vandalism. Understanding the latest options in coverage makes it easier to compare various insurance policies to find the best coverage available for your budget.
Comparing covered events
Various home content policies provide insurance for a range of different possible content loss scenarios. Most typical policies will cover some portion of damage to your personal belongings in case of natural disaster, theft, vandalism or environmental damage, such a tree falling on your house or water damage. Optional coverage can include damages caused to home contents while moving or damages caused during a period of renovation. Selecting the right coverage for your home contents should include a detailed review of the conditions under which you will be reimbursed for property loss. For example, Company A might include coverage for replacing locks, while Company B might consider that an optional add-on. Comparing at least three different home contents policies will ensure selection of the most valuable plan in terms of coverage and cost.
Comparing covered contents
Each home content insurance product will compensate you differently for your content loss. Some insurance companies provide a direct replacement reimbursement (generally termed as old-to-new), while others may specify that only the current value of the product can be reclaimed. This is an important point to consider when making comparisons between home contents products. Additionally, while you are generally insured for a specific total dollar amount, many policies limit the amount they will reimburse for certain items such as computers, jewellery, collectibles, entertainment mediums, and art work. Examine each policy carefully to understand the limitations on particular items when making your comparison. Keeping a list of policy exclusions and conditions will clearly illustrate which policy has the most to offer.
Optional coverage
In addition to the standard coverage provided, most insurance providers will also allow you to add optional coverage to increase your home contents protection. Optional coverage allowances and costs offer yet another method for comparing various policies. If an optional coverage is something you are not interested in, you may be able to get a lower rate by excluding it; however, you don't want to get stuck paying extra for something that is an additional expense on one policy and included in another base policy of equal value. Some standard content options to consider include:
- Electrical components and connections
- Perishable items
- Personal items belonging to guests in your home
- Lock replacement
- Portable contents
Regardless of your home contents insurance requirements, making a detailed comparison of available policies or using a broker will ensure that you get the most value out of your premiums should you ever need to make a claim.