Let’s Discuss Insurance Matters

We see them on TV; read about them in the news; hear about them on the radio: disasters aplenty now days, some natural, others not so. These disasters happen to other people, not us. And that idea is probably one of the great fallacies of our time. From a natural standpoint, there’s no doubt that our weather patterns have changed considerably. We’ve all witnessed just how tragic that can be. Summers are hotter and drier; storms more violent.  Winters are colder and in some places wetter with flooding more common than ever. So, year-round we’re at the mercy of increasingly unpredictable elements. I guess you could say that the only thing predictable about our weather is its unpredictability! 

This is one major reason why you need insurance, and not just insurance for your home/building. But let’s start with the building side of things. The increasingly unpredictable nature of our weather increases the risk of damage and risk is a major factor insurers consider when insuring properties. You may well find that the risk of fire/flood/storm damage impacts negatively on the insurable value of your property, leading to reduction of 20% or more over the life of a standard mortgage. And even if you’re mortgage free, you still must pay for rebuilding and a reduction in insurable value could compromise the overall ability to give you what you want, or even complete your rebuild, let alone refurnish.  Additionally, your premium could well increase so you’ve lost out on all counts. Home insurance should always be taken from the day you exchange contracts on your new property. Why then? Well, the vendor may not have insurance! Also, by way of example, in the recent bushfires some insurance companies placed embargoes on new policies in impacted or high threat areas. Those already insured were covered, but scrambling to take insurance while under imminent threat, were unable to do so. Now, that’s not a nice position to be in.

And it’s not just natural disasters that can befall us and not just our ‘bricks and mortar’ that can be impacted. Our possessions, no matter how few or how humble have a value and whether it’s a $5000 fridge or a $500 model needs replacing after a mega power outage destroys the electrics, or your puppy destroys your lounge in a fit of boredom (that happened to me), without contents insurance you could be up for a considerable amount. Most contents insurance policies now cover you ‘new for old’ which means you get brand new items to replace those lost, no matter how old. And its not just homeowners who should take contents insurances, renters too should ensure all their belongings are insured.

Of course, items don’t have to be damaged to warrant an insurance claim. Instances of opportunistic theft by way of home or vehicle break-ins and the like are on the rise, so insurance of your personal possessions not only allows you to replace those items in the material sense, it allows you to return to your everyday lives without on-going deprivation.  Contents insurance can also cover accidental breakage like an ill-directed football through the tv screen and even the loss of items in the garden or beyond your property. And items such as carpets and blinds can also be covered by your contents insurance. With so many avenues now available to us to protect our belongings, it makes no sense not to take them up.

I believe everyone should be insured across all areas. Yes, insurance is an on-going cost and it’s that very issue (plus the misguided it-won’t-happen-to-me belief) that has many believing home only, or contents only or no insurance at all, is alright. But when the chips are down and you’ve lost your home and/or your belongings and you end up relying on the generosity of others, the cost of being uninsured or underinsured is suddenly an unwelcome, very sobering – and totally unavoidable – reality.