Home and Contents Insurance Q&A
Do you know how much your home contents are worth? Or, what may be classified as home contents? In this article we aim to answer some of these frequently asked questions when it comes to home and contents insurance, which you may find useful. Note, the information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs.
Q: What are considered as the difference between home and contents?
A: Home insurance typically protects the building and things that are permanently attached to it.
Contents insurance then typically protects other items in the home, such as furnishings, white goods, clothing – and also carpets, curtains, linen –Contents may also include items in your shed and items you keep outdoors on your property. Some additional contents benefits include vet costs for your cat or dog if they are injured in a road accident during the period of insurance covered up to the limit set out in the Product Disclosure Statement.
Different insurers have different terms and conditions, so it’s worth checking the Product Disclosure Statement before you buy insurance.
Q: How do you value home contents?
A: Traditionally, most people just make their own estimate, but the evidence suggests that most people underestimate¹.
The good news is that there are calculators available to help you estimate the replacement value of your buildings and/or contents, visit <link to COTA website calculators> and use our Home Buildings and/or Home Contents replacement calculators.
Taking photos of each room can be useful to provide proof of value and ownership at claim time. Over the years you may have accumulated more than you think!
Q: What happens if home or contents are under insured?
A: If the value of your home or its contents at the time of a loss is greater than the value you insured them for, you could be underinsured by the difference in value.
For example, if you insure your contents for $50,000 and they are all damaged and they cost $100,000 to replace in a total loss event, insurers may only pay the $50,000 that you are insured for.
The key value of insurance is to protect from unexpected events like fire or theft and return you to your previous state. This is only possible if the appropriate level of cover is maintained as your lifestyle changes over time.
The annual renewal of your insurance policy is a good reminder to review and update your home contents inventory, and make sure your amount insured is adequate to meet your needs.
Remember to evaluate the estimated value of your home and contents by visiting https://www.cota.com.au/products/home-contents/ and scrolling down to the calculators.
Insurance and Membership Services Limited ABN 59 057 159 743, AR No 246235 trading as COTA Insurance arranges this insurance as agent for the insurer Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL No. 234708. We do not provide any advice based on any consideration of your objectives, financial situation or needs. Terms, conditions, limits and exclusions apply. Before making a decision, please consider the relevant Product Disclosure Statement available from www.cota.com.au. If you purchase this insurance, we will receive a commission that is a percentage of the premium, paid for each policy ranging from 0.3% to 30%. Allianz also pays us a percentage of the profit which exceeds the agreed profit threshold for Home (excluding flood), Landlord (excluding flood), Motor and Caravan and Trailer policies arranged by us or renewed with Allianz in each calendar year, provided that the agreed premium threshold is met for these products. Additionally, we receive a marketing allowance from Allianz every 2 months, which is a percentage of the total premium earned on these policies in the previous 2 months. Ask us for more details before we provide you with services.
¹ Understand Home Insurance Research Report http://understandinsurance.com.au/assets/research/ICA%20Understand%20Home%20Insurance_Report.pdf