5 Home and Contents Insurance Myths Debunked

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5 Home and Contents Insurance Myths Debunked

The good, the bad and the surprising… What is and isn’t claimable on home and contents insurance? Before you sign up, make sure you understand what you’re in for.

What kind of coverage are you getting? Is your priceless antique collection insured? Did you remember to add the new TV to your policy?

We’re here to debunk some of the common myths of home and contents insurance, including what you can and can’t claim. You’ll thank us later.

1. Myth: The value of your items is what you paid for them

The biggest myth when it comes to home and contents insurance is that you estimate the value of your belongings based on what you bought them for or what you could sell them for. The reality is you’re valuing them at what it would cost to replace them.

This doesn’t mean you can start exaggerating wildly – your insurer will certainly ask questions and, quite often, for proof of value. But if you’re valuing your clothes and think no one would pay more than $10 for the whole shebang, think about what it would cost you to replace a full wardrobe in the event of a fire.

The exception here, of course, is if you happen to have a closet full of designer couture (and don’t we all?), which would require a more specialised policy.

2. Myth: You don’t need insurance if you’re renting

There are multiple types of home insurance, including building insurance, for the home’s structural foundations; landlord insurance, specifically for property investors; and contents insurance, for your belongings.

What’s important to know is that even if your landlord has insurance, it doesn’t cover your personal belongings. For instance, if your rental property is damaged due to fire or flood and your items are impacted, you will need your own contents cover to claim on any of your personal belongings.

3. Myth: You can’t insure work items at home

If you have a laptop, tools or other work equipment that comes home with you at night, you can still list these items on your home insurance policy.

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Even if you bought these items through your business, if they spend a lot of time at your home and are at risk of being damaged or stolen there, consider adding them to your policy as optional cover.

4. Myth: Jewellery is automatically covered

Not all jewellery will be automatically covered in your contents insurance.

There is typically a maximum limit to what you can claim on your policy. If you’ve been sitting on the Hope Diamond and it gets stolen, your average insurer simply won’t be able to replace it or provide compensation equivalent to its value.

Picture: Iamngakan eka/Pexels

If you own any jewellery at the more expensive end of the scale – such as over $15,000 – read your contents policy and, ideally, chat to your insurer about your options.

You can also have specialty items professionally valued to avoid any hairy questions should unfortunate events befall your priceless (or rather highly-priced) belongings.

5. Myth: Your insurance policy is set for life

If you’ve bought any new appliances or items for the home recently, then it’s worth letting your insurer know about these new additions – to make sure you’re covered for all of them. Failure to alert your insurer could render parts of your policy void. Nobody wants that.

Got a dog? You may want to add pet cover to your plan.

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There are a number of reasons to keep your insurer in the loop, bearing in mind that it doesn’t always mean a hike in your premium.

As with just about anything, it’s always best to chat it through, ask around and get a second opinion and listen to the experts.

Source: Realestate.com.au – Youi 
Hero image: Jordi Pujadas/Unsplash