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Understanding Contents Insurance

How Premiums Are Calculated

The premium for contents insurance is based on the likelihood of a claim being made on your policy in the future. Your insurer may take into account many different factors when calculating your premium, including:

  • The basic Excess amount you choose
  • The age of the person buying the policy, and other people the policy covers
  • The amount your contents are insured for (your sum insured)
  • The level of cover you have chosen – Defined Events or Accidental Damage
  • How your home is occupied
  • Location of your home
  • How you use your home (for example, whether you are operating a home-based business)
  • The risk profile of the location, including crime rates and the risk of natural perils such as floods, bushfires and cyclones
  • Security measures fitted to your home

Having Enough Contents Insurance

Many Australians underestimate the value of their contents, particularly if they haven’t written down what they own or haven’t updated a contents inventory list for a while. It’s easy to forget to add new things you have purchased recently and gifts you have received.

When working out what level of contents insurance you need, start by listing all your belongings and assess how much it would cost to replace them at today’s prices.

Many insurers have inventory apps for smartphones and portable electronic devices, as well as downloadable online programs that may help you put together your own home contents inventory.

You can also find a calculator to help you work out the value of your contents like the one on our website.  Online Calculator

What Are You Covered For?

You can choose different levels of cover under a contents policy. The least expensive option, which gives you the bare minimum of cover, is a defined events policy, which would typically only cover your belongings if they were lost through defined events such as fire or if you were burgled.

For a much broader level of coverage, policies that include accidental damage will protect you against the cost of incidents such as accidental breakage, or even a stain on a lounge or carpet.

Most contents policies have fixed, unfixed or flexible limits on how much you can normally claim for certain items. For example, your contents policy may only pay up to $500 for a ring, even if it would cost $2000 to replace.

Valuable items may need to be insured for a higher specific value or listed separately under your policy otherwise they might not be covered for their full value or may be excluded from a claim.

It’s important that you get a separate valuation for expensive items such as jewellery, and make sure they are listed individually in your policy. You may need to pay an additional premium to properly insure all valuable items.

You should also declare anything that could be classified as a collection to your insurer, such as DVDs, rare books or stamps.

For more information or to speak with one of our experienced brokers, please call:

1800 AUSTBROKERS (1800 287 827) and select your nearest branch or click below to request a call back.

Request a Call back

 

 

Information obtained from www.understandinsurance.com.au

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