How to Avoid Under-Insuring Your Home

Avoiding Home Under-Insurance

Avoiding Home Under-Insurance

For most people, the family home is the most expensive asset they will own in their lifetime.  It usually takes decades of mortgage repayments and hard work to pay off the family home.  Unfortunately there is also a risk that your home will be damaged or destroyed by accident, fire or natural disaster.  That’s why most people insure their property.  But what if your level of insurance was inadequate and you couldn’t afford to rebuild?  That is called under-insurance.  Here are some simple tips to make sure your policy will cover the cost of rebuilding or repairing your home, if it is damaged.

Update Your Policy When you Renovate

Many people spend thousands of dollars updating their property, including expensive new bathrooms, kitchens, decks and pools.  However, many of them forget to increase the value of their insurance policy.  What happens if there is an earthquake and the pool you just spent $25’000 on develops a massive crack?  It is very important to remember to include any changes in the value of your property in the insurance policy.

Get an Evaluation

One way to ensure your property is fully insured, is to hire a property evaluator to examine it.  A property evaluator is knowledgeable about construction techniques, materials and the costs of rebuilding.  You might have built your property 25 years ago when materials were cheaper and the quality of the construction may be to a higher standard.  A property evaluator understands the cost of materials in today’s money and can price in any higher quality construction used within your home.

Think About Additional Costs

Many people think about the costs of rebuilding without considering the additional costs involved.  If your house burns down, there may be additional costs to remove the wreck of the house.  There may be damage to the utilities going into the house, which require more money.  An earthquake could destroy long water pipes, gas lines and sewerage which run on your property.  If the house contains asbestos, there may be expense associated with removing it.  There may be substantial groundworks required before rebuilding.

If your house was built with poor quality foundations that conformed to the building requirements 50 years ago, that may no longer be the case.  If that house is destroyed, the new house may have to comply to an array of new building requirements.  If your house is built using materials that are now expensive, ensure the policy will cover buying those materials again.

Think About Site Problems

Some properties have tricky issues involved with building on the site.  These issues can increase the cost of rebuilding a home.  Is your land severely sloped?  Are there issues with sinkholes in the area?  Is the site geologically stable for a modern house to be built upon?

Are There Additional Structures?

Think about the expense of attached structures.  If you have recently built a very expensive garage, garden shed or workshop, make sure it is covered in your insurance policy.  If you have an expensive stone wall, make sure your insurance policy also covers that.  An earthquake could destroy everything on your property, not just your house.

Understand Exactly What is Covered

It is crucial to understand that only certain risks will be covered by an insurance policy.  Not all policies cover flood damage in the same way, with water run off being treated differently than flooding from a river.  Many people have been caught out by insurance companies in the past for that.  Read the fine print and understand what natural disasters and criminal acts your property is covered against.

Get Quotes

One way to ensure you are sufficiently insured, is to get a qualified builder to estimate the costs of rebuilding your home.  He will have access to the actual prices of the materials used and will understand the quality required.

Ask Questions

If you are unsure about what is covered in your policy, ask questions!  The insurance company must be upfront about your policy and inform you about what is covered.  If you are talking to them on the phone about a specific point, ask for a reference to the terms and conditions which demonstrate it is covered.



Cheaper Home Insurance Premiums

Home Insurance

Home Insurance

In recent years the number of natural catastrophes that have occurred world wide has increased. Some scientists suggest that this is due to increasing global temperatures and related climate change. Whatever the cause, it has had a dramatic effect on the cost of insurance premiums as more natural disasters occur.

Everyone wants to make sure that their home is covered by insurance that handles natural disaster incidents but it is increasingly difficult to do so with high premiums. Fortunately there are a number of ways to obtain insurance for natural disasters and lower the cost of premiums.

A lot of people simply choose an insurance policy from the Internet and hope that it covers all of the natural disasters appropriately. Others just walk into an insurance agency and hope that the insurance agent gives them the right insurance at a good price. Unfortunately you may not get the best deal and may not have the most comprehensive cover against natural disasters. You need to scrutinize the policy in it’s entirety and look at ways you can lower the premium.

One way to save on premiums is prepare your home for natural disasters. If your local area experiences a lot of storms, you could install measures which prevent damage, like storm shutters. Then you could find an insurer that gives you a discount on your premium for having those shutters installed. In the long run the money saved is substantial. You can also install security devices or get a dog to save money on your home insurance as it reduces the chances that your home will be burgled.

You can also combine, or consolidate your insurance policies. You can obtain a discount on your insurance costs if you combine policies, so get you car insurance, home insurance and life insurance through the same company. Discuss a discount with the insurance company directly or ask your insurance agent to negotiate on your behalf.

It’s also a great idea to exclude the value of your land from any insurance policies. Natural disasters won’t affect the land (unless you have a property built very close to the coastline). So if the insurance company asks you for the value of your property, just include the price of rebuilding the home and the value of the contents of the home.

By using these three simple tips, you can save a great deal of money on the cost of insurance in the long term. With the increase in natural disasters it’s more important than ever to have sufficient insurance.

Why Property Owners Should Check Liability Insurance

Tradesmen Liability Insurance

Tradesmen Liability Insurance

If you happen to require a tradesman to carry out any kind of work on your property it is crucial you make certain they have the appropriate liability insurance coverage set up.

Failing to confirm whether a tradesman is bona-fide and covered by insurance against all his work’s liability pitfalls, has in some serious scenarios, cost the home-owners using tradesman, their houses!

There are many challenges that a tradesman will expose a property owner to over the course of their job, as a result of their work. Most of these potential risks include an injury to persons in the home owners family, or the public or the tradesman’s workers. The kind of accident and injury which could take place could result in a tradesman being sued for damages or injuries.

By way of example, you as a prroperty owner are accountable for the condition and basic safety of your home’s roof structure. Perhaps you recently used a local roofer to do some repairs to the house roof and swap some roof tiles. You were happy with the work and paid him.

A while later these same tiles dislodged in a mild wind and dropped, critically injuring a passer-by who subsequently sues you for his injuries which are severe.

Perhaps you contact your insurance company to tell them of the claim against you. The home insurance company after sending around an insurance assessor, refuse to pay out saying that it was the proximate cause of the job of the tradesman you utilized and you will have to chase your claim against him.

You establish that the roofing company was without insurance and he says you were content with his job at the time and signed it off by compensating him. Your attorneys explain to you that as the roofer does not own any property and consequently it is not worthwhile to pursue the claim against him. You will have to carry the costs.

Meanwhile the costs of the claim are growing as the litigants legal teams add thousands to the lawsuit against you. There isn’t enough money to settle the lawsuit out of court and are compelled to sell your house.

This horror scenario has happened to so many people, just because they did not check the state of the tradesman’s liability insurance before they hired them.

All good tradesman should have not less than $1 million in public liability insurance protection which guards them against claims from the consumer and public. If they use any staff they are required by law to have employers liability insurance coverage for which a certificate is always supplied.

Prior to signing or verbally agreeing to hire any sort of tradesman you must request to see the duplicate of either the insurance policy schedule outlining the public liability indemnity cover or the employers liability certificate if the tradesman has any employees. Create a copy if you’re able to, or otherwise look at the policyholders identity is the same, grab the insurance company particulars and policy number and verify that the expiry date is valid.

In the event the tradesman is unable to offer these details, then it is really preferable to pick up the phone book and look for other tradesmen.