By Jeremy Rochow
Published: Thursday, March 4, 2021
More than 8 out of 10 Australians don’t have adequate home and contents insurance to cover them if something goes wrong, according to industry figures. To avoid financial heartache in the future, you need to update your insurance regularly.
When buying a house, most people purchase home and contents insurance. In fact, some banks require you to buy it before your loan’s finalised. During the process, your insurer may ask you for a dollar figure of what you want covered.
Then, you’ll probably forget about it. However, after some big investments you should update your insurance to ensure you’re adequately covered. Here are 4 situations when you should plan a review.
1. You’ve renovated your house
Re-tiled your bathroom or updated your kitchen lately? Maybe you’ve added a new room or built a shed in the backyard.
If you have, your home may have increased in value. To make sure your home is adequately covered, you’ll want to update your insurance.
2. You’ve accumulated more possessions
After moving into a house, you slowly accumulate possessions. Maybe you’ll buy a new smart TV or upgrade your fridge.
With each new addition, the value of your contents increases. That’s why it’s a good idea to update your insurance annually, so you’re not left out of pocket if you need to make a claim.
3. You’re starting a home business
Are you thinking of starting a small business at home? Maybe you want to establish a home bakery or you’re looking to refurbish furniture in your shed.
Depending on the type of business you’re running from home, you’ll want to speak to your insurer to make sure you’re still covered.
Some insurers might agree to continue a home insurance policy as is, some may put conditions on the home insurance policy such as excluding business activity, while others may not cover you at all.
4. You’re renting out a room
Renting out a room or the granny flat in your backyard might sound like a good idea to make a little bit of extra cash, but there are a few things you need to consider. Insurance should be at the top of that list.
Renting out a room to someone or offering accommodation on platforms such as AirBnb could be considered as a business activity by some insurers.
You may need specialised cover for this, as it may impact your home insurance policy.
A final word of advice
Check your insurance regularly. Most insurance policies will renew annually – your insurance provider will send you an update to confirm this. This is a great time to update your cover if you’ve made any changes.