3 Questions to Ask When Updating Your Home Insurance

When you’ve invested money into a big home purchase or renovation, it makes sense to ask some questions and make sure you’re covered by your home insurance.

It takes a lot of effort to make your house a home. And if you’ve recently renovated, upgraded your appliances or redecorated with new furniture, you’ll know it also takes a lot of money.

But what would happen if an unexpected event damaged your home – or if your new items were stolen?

If you haven’t reviewed your home insurance lately, ask yourself these three simple questions to see if your existing policy will adequately cover you.

1. Have you made changes to your home?

Any renovations or improvements that increase the value of your home – or its cost to rebuild – should be reflected in your home insurance’s building sum insured amount. So if you’ve upgraded your kitchen or bathroom, or added a deck or other room, it may be time to review your home insurance.

When deciding how much extra building cover you need, consider the current total cost to rebuild, including GST and all improvements.

You should also include the costs of demolition and debris removal, complying with any new building standards, and paying architectural, engineering, surveying, construction and legal expenses. These can all add to the rebuilding costs if your home is damaged or destroyed.

2. Have you bought new things?

Whether it’s a new lounge or dining table, carpets, technology or sporting equipment, your belongings can add up to more than you think.

The theft of expensive items could set you back if they need to be replaced. And a fire or flood could see you having to replace all your contents – including fixtures and fittings like carpets and window furnishings – so it’s important to have the right amount of contents cover.

To understand what your contents are worth, do a room-by-room inventory of items including your storerooms and the garage. Then work out how much it would cost to replace everything.

3. Do you have the right type of insurance?

Building and contents insurance protects against damage or loss of your property and belongings. If you own your own home, you can bundle these covers together. If you’re renting or live in a strata building, you may want to consider contents insurance.

If you already have building and contents insurance in place, remember to review it regularly to make sure it’s still up to date.

This article originally appeared on the Commonwealth Bank.

All pictures are courtesy of realestate.com.au

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This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice.

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