In 2005 the Australian Securities and Investments Commission (ASIC) estimated that an astonishing 70 per cent of Australian homes were under-insured.
Under insurance results from valuing an asset, such as your property, too low to replace in the event it's damaged.
Insurance firms - particularly those specialising in home, contents and landlord insurance - can offer some guidance when it comes to valuing your property, but ultimately the responsibility lies with you the consumer. Only you can nominate how much insurance to take out on your assets.
The Insurance Council of Australia has compiled the following guidelines to help Australians avoid losing out as a result of under insurance:
As you accumulate new appliances, technology and furniture, the value of your property's content increases; remember to update your insurance accordingly
The cost of building rises each year, while building regulations and bylaws are also frequently tweaked -review your insurance annually to factor these changes in. There are many free web calculators to help you tally potential costs. Alternatively, contact a local builder for advice
It's vital that you base your insurance premium on the actual value of your assets, rather than pulling an arbitrary number out of the air. A room-by-room assessment of the value of your assets is time consuming, but it may ultimately save you big bucks
If you don't really understand your existing insurance policy, it's time to start asking questions. Don't be shy, no one expects you to be an expert
If you've renovated or improved your property since your insurance was initially taken out, it's important to add the value of the improvements to your policy
Compare different policy types to find the one that perfectly fits your needs - such as a sum-insured policy, a sum-insured policy plus margin, or a total replacement policy
The information contained in TenancyCheck.com.au website is general information only and does not constitute legal, financial or compliance advice. As the laws relating to tenancy agreements may have changed we recommend you check with the relevant State or Territory government department. We also recommend that you obtain your own independent legal advice about matters relating to landlord obligations, tenant rights and any legal disputes you may have with a tenant(s).