Updating Your Insurance for the New Year!

2016 is here and now is a good time to start updating your home and contents insurance policy.

Don’t put this off because you think it will cost you money, it will cost you much more money in the long run if you don’t update your insurance cover, as there is always the possibility that your insurer may void your policy for non-disclosure. Also by updating you can re-assess what you really need to specify on the policy and what you don’t need to.
Recalculating the value of your home is a very important exercise, as property values always go up and rarely down. So it makes perfect sense to make sure that your house is adequately insured for the correct value. This is also important as most policies have the Average / Co-insurance clause.
This means that you must insure for the full value of the property Insured. If you under-insure, your claim will be reduced in proportion to the amount of the under-insurance.

A simple example illustrating the basic principle, application and effect of the Average / Co-Insurance clause is as follows:

Full Value of the Property Insured = $ 1,000,000
Policy Sum Insured / Declared Value = $ 500,000
Therefore you would be self-insured for 50% of the full value.
Amount of Claim = $ 100,000
Amount Payable by the insurer as a result of the application of the Average / Co-Insurance clause = $ 50,000 (50% of $100,000)
Therefore if you have added any internal fittings or fixtures such as new light fittings, cupboards or flooring for example you must make sure that you factor them in. You also need to factor things in such as structural improvements to the house, new fencing, swimming pools, outbuildings, pergolas etc.
The same thing applies for your contents insurance. Do a proper Inventory it does not take much time to do this and is well worth the exercise. The inventory must list pretty much everything that you own such as:
• Furniture
• General appliances
• Clothes
• Jewellery
• Collections of books, stamps etc
• Carpets
• Linens
• Rugs
It’s important to do this inventory as a year is a long time to accumulate more stuff.
A good way of doing the inventory is also with the help of a camera. Take photos of everything as this is a good way of proving what you had in case of making future claims.
Another important reason why you should conduct the review is to make sure that certain items are indeed covered by the insurer. For example, if you have been given a new phone or laptop for Christmas does the policy cover these types of things when they are outside the home?
Query the exclusions on your policy, some high-cost items like art, for example, are exempt from coverage.
Double-check the limits for valuables items such as Jewellery. If limits are too low consider to add extra cover to cover these items.

Finally being a new year, so it’s a perfect time to also consider options where both home and contents are concerned. Get a few quotes and make sure that your current insurer is competitive. For assistance with your insurance call our ally Alex Franchitti via his website.