“The first cheque you write is for the mortgage. The second is for the insurance.” Even though ‘home and contents insurance’ is often quoted as a package deal, they are two separate policies and each needs investigating on their own merits. Here are a few tips from the team at Mimosa Homes.
Home insurance is a little more straightforward than the contents side of the policy. It is the estimated cost of replacing your property if it were to burn down tomorrow. The estimation excludes the value of the land it is sitting on but there are two potential choices with most insurers. The first is total replacement cover and the second is sum-insured cover.
This will pay all expenses needed to rebuild, or repair, your home to its exact condition before your unfortunate event.
This gives you a set limit that will cover a rebuild. It represents the maximum value of your home and it is imperative that you calculate correctly or face being in financial hardship after an event. When estimating the value of your home you must factor in the cost of the building, fixtures and fittings and any improvements that you’ve made to the building such as pergolas, decks or swimming pools. It is recommended to get professional advice when costing a rebuild as values of materials or sloping blocks can adjust the value.
Most home owners concentrate on their major items; television, fridge and electronics, but you need to factor in the costs of replacing all of your possessions including soft furnishings and crockery. It is best to walk your home and draw up an inventory of possessions. Take photos and store receipts in case you need to make a claim.
Expensive items here are the fridge, oven and dishwasher. You then need to list everything from the microwave and toaster to the pots and pans and cutlery.
The dining table and chairs will be the largest items, then buffets or sideboards. Also, don’t forget any curtains, blinds or flooring and the family silver.
Start with the furniture: sofa, lamps, coffee table and entertainment unit. Then list your electronics; television, games console, DVD player and your collection of CD’s and DVD’s.
The master bedroom is where the family heirlooms are likely to be kept. Remember that most insurers only cover for $1500 of general jewellery. If you need more cover than this you will have to post a specific item policy. This will increase your premium but you will have peace of mind if you ever lose the items. List all beds, bedding and wardrobe contents. (And wardrobes, of course!)
Depending on your chosen policy, you may be covered for loss of garden furniture, tools and bicycles or toys.
Read the Fine Print
Your individual circumstances will decide the policy you choose. Read the fine print and record as much evidence as you can. Overestimating will have you paying a higher premium for cover you don’t need while undervaluing your home and contents can leave you out of pocket. Whatever you choose you will want to protect the investment that is a Mimosa Homes house and land package. If you need to contact our friendly team please feel free.