It can be difficult to keep track of the value of the items we buy and accumulate over time. This leads many Australians to undervalue the average home contents value.
Home Insurance
Top reasons to update your home insurance coverage
Discover why updating your home insurance is essential and learn how life changes, renovations and rising costs can impact your cover and protection.
Home insurance is designed to protect one of your most valuable assets: your home and its contents.
"Home insurance helps provide protection for what's important, such as your home and contents, in case of an insured event like fire, flood, storm or theft," explains Bill Bloodworth, General Manager Home Insurance at RACV.
"It gives you peace of mind and confidence that if something unexpected does happen to you, like an extreme weather event, you're able to get back on your feet."
But as your life evolves, so too should your insurance coverage. Many homeowners take out a policy and rarely revisit it, which can leave them underinsured or exposed to unexpected risks. Regularly reviewing and updating your home insurance helps ensure your cover reflects your current circumstances.
Here are the top reasons to revisit your home insurance policy.
How often should you review your home insurance?
As a general guide, it's wise to review your home insurance at least once a year – ideally before your policy renews. However, you should also reassess your cover whenever you experience a significant change, such as renovating, purchasing valuables or altering how your home is used.
Victorians should consider whether they need to update their home insurance.
Why you might need to update your home insurance coverage
Changes in circumstance
"It's important to ask yourself whether your home insurance policy aligns with your current personal circumstances and living arrangements," says Bloodworth.
"It can be easy to forget the impact of life milestones such as getting engaged, undertaking a home renovation, taking a new job or participating in a new hobby or interest, and their effects on your home insurance."
For example, an engagement usually comes with an expensive engagement ring, while getting a new job might prompt you to invest in a new laptop or smartphone.
Life events like moving in with a partner, starting a family, and adult children leaving home all also warrant a review of your home insurance policy.
Renovations and upgrades
Renovations, extensions and other significant home improvements can drastically impact your home's value - and the cost to repair or rebuild, should an unexpected event occur.
"Whether you've added a deck, upgraded your bathroom or replaced your carpets with flooring, it's a good idea to update your home insurance coverage," Bloodworth says.
Add together your costs, including any demolition, debris removal, materials and rebuilding fees, along with any reasonable fees for an architect, engineer or surveyor, to estimate the additional value you need to add to your home insurance cover.
Gifts and large purchases
The cumulative value of your possessions can quickly add up. Some items can even appreciate in value.
"Sentimental and high-value items such as watches, jewellery and family heirlooms are usually top of mind when it comes to considering your home and contents insurance coverage," Bloodworth says. "But it's everyday items, new purchases and even birthday or Christmas presents that we sometimes forget to account for."
Check whether your new computers, tablets, home office equipment, home entertainment, exercise equipment, fitness wearables and kitchen appliances are all covered by your home insurance policy each financial year.
To help you estimate the approximate cost to replace your home contents, use RACV's Home Contents Insurance calculator.*
Phones, laptops and other items used outside the house may require Portable Items Cover.
Portable items
Common items used outside of the home, such as phones, laptops, surfboards, golf clubs and other holiday items may require the addition of optional Portable Items Cover to your home insurance policy.
This type of insurance helps cover certain items when you take them outside your home.
More frequent natural disasters
Devastating floods, severe storms, summer bushfires, golf ball-sized hail and even earthquakes – if the past few years have taught Victorians anything, it's that the next extreme weather event can happen at any time.
The increasing severity and frequency of extreme weather events has implications for the way we protect the things we own and treasure the most, such as our homes and contents. It's important to update your home and contents insurance coverage to cater for the threats you might be more likely to encounter.
"For most of us, our home is the biggest financial investment we make in life," Bloodworth says. "Because of how quickly severe weather events can occur in Victoria, we all need to be prepared and vigilant, which includes having adequate home insurance coverage in place at all times."
The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.
* The RACV Home Buildings and Home Contents Calculators provide an indication of rebuilding or replacement costs only and in no way guarantee the amount RACV Insurance may agree to insure your home or contents for. It is your responsibility to check that this amount is enough to cover the rebuilding costs of your home or replacement costs of your home’s contents at today’s prices. Before you decide whether to buy or continue to hold RACV Home Insurance, you should calculate the actual replacement value of your home and contents and consider the information in the Product Disclosure Statement.
