We all have vivid memories of the shocking devastation wrought by summer bushfires. These tragic events left many property owners reeling as they realised that the cost to rebuild the homes lost was not adequately covered by their insurance, or that they were not insured at all. Once you can see the flames, it’s too late to call your insurer. With summer approaching, now is the time to review your insurance arrangements and make sure you are properly covered.
- Is your insurance current?
- Are your sums insured adequately?
- Have you considered the true cost to rebuild your property?
Insurance Australia Group (IAG) have released an excellent guide to Bushfire Facts
How much should I insure my property for?
We are often asked what a “typical” sum insured is. There is no such thing. That’s a question only you can answer, and in fact, it would be a serious compliance breach for any broker to suggest a sum insured to you. Determining sums insured can be confusing, so here are some tools to help*.
It’s not just about what a builder would charge you to replace the building… there are other potential costs involved:
- Clean-up of the site
- Removal of debris
- New building codes that may apply (BAL ratings)
These additional factors can add tens of thousands of dollars to the cost of rebuilding, which you may not have considered in your insurance sum insured.