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Is it time for a home and contents insurance health check?

Making sure you’ve got the right insurance cover isn’t just a one-time proposition. Not only is your life constantly changing, the cost of replacing or rebuilding tends to go up over time as well.

To make sure your insurance cover is right for you, it’s important to make sure you review your insurance regularly. Here are some key times when it makes sense for you to take a look at your cover.

When you renovate …

If you’ve just put in the kitchen of your dreams or completed a major extension, your existing cover may no longer be right for you. Having recently completed the renovation, it might be a good time to check your cover, to see if you need to increase the level to take into account the work you’ve just done to your home.

When you’ve made a big ticket purchase …

Whether it’s a new set of golf clubs or an engagement ring, make sure you consider updating your cover to ensure your new purchase is covered. Keep in mind that most policies will have limits on individual items, so if you’ve bought something of value (such as a diamond ring), you may need to itemise it separately.

When you’ve started using your home or vehicle for different purposes

Most policies only cover you for certain events and circumstances. So if you change the way you use your home or vehicle – such as using your vehicle for work or setting up a home office – your cover could be affected. It’s important to get in touch with your insurer if your situation changes.

When you’ve moved …

If you’ve moved into a new home, it may not have the same security features as where you used to live. Likewise, your new neighbourhood could be considered at higher risk of crime for example, or perhaps the area is more prone to flooding, or at risk of bush fires. Make sure you let your insurer know you’ve moved so you know if you need to make any adjustments to your cover.

When it’s time to renew ….

Most insurance policies run for 12 months, with some exceptions such as travel insurance that covers specific events. Your insurer will let you know when your policy is due for renewal (you can find details of exactly when in the PDS); take the time to check you’ve still got adequate cover and that all the original information you supplied is still correct. You should also make sure you pay your premium on time to ensure you don’t run the risk of being without cover.

Been in the same place for a while? Rebuild costs can go up significantly over time

Rebuilding costs generally go up over time and building codes change, the result being if you’ve lived in the same place for a while, the costs associated with rebuilding may have changed significantly. Let’s say for example when you first moved in your home it was insured for $250,000. Fast forward to the present day and it could cost $400,000 to replace. If you haven’t updated your insurance, that’s a big gap in your cover.

Rather than estimating what the current rebuild cost would be, it’s a good idea to get a professional valuer in to give you a realistic replacement cost.  Not only will they take the rebuild in to account, they’ll also be able to consider other costs such as architect fees, demolition and debris removal.

Insurers (including Westpac General Insurance Limited) often have building calculators on their websites that can help you work out how much you should insure your home for.