Protect your home with RACV Home Insurance
How to choose the right home insurance for your needs
Thinking about buying home insurance? Here’s a handy checklist to help you find the right insurance for your needs.
No two home insurance policies are the same, and while one may on the surface appear cheaper, it may provide less insurance protection.
We’ve created this handy checklist to guide you through the home insurance maze and help you secure the right cover for your home buildings and contents. Use it when you are considering buying home insurance as it will shed light on your options and highlight some of the differences between policies.
Home insurance checklist: What you need to consider
Home contents insurance
What sort of contents insurance cover are you being offered and do you understand what it means?
Sometimes called ‘Defined Events’, these are the events you are covered for should they cause loss or damage to your contents. This is usually the standard insurance cover for home contents.
Have you checked the list of events offered to ensure they are appropriate? The secret with ‘Listed Events’ is to ensure the events you need covered at your home are included in the list offered. You need to compare these lists between different policies as they are not all the same. For example, does a policy include extreme weather events such as hail damage, fire or flood cover?
This provides additional insurance cover as it not only covers your contents for the events listed but also for loss or damage that occurs accidentally at your home. For example, if you drop a glass of wine and ruin your carpet or accidentally knock over the TV, you can still claim for this damage. You will usually pay a higher premium for this type of cover.
General contents insurance limits
Have you checked and compared the general contents limits offered? There are usually limits to what a home insurance policy will pay under general contents for items such as jewellery, watches, CDs, works of art and cash. These limits will be listed in the Product Disclosure Statement, so check these limits and compare them when you are looking at different insurance offers.
If these general contents insurance limits are not enough, have you checked and priced the option to insure single items? You may have pieces of jewellery, for example, that exceed the general contents cover limits offered for jewellery, so make sure the policy you choose has an option to provide additional cover for these items where required – these are often called ‘specified items’. You need to price up these ‘specified items’ with the insurance provider too before making a decision to proceed with your insurance, as they will add to your premium cost.
Do you need cover for some items outside the home? Have you checked and priced these options, if required? Laptops and wedding rings are great examples, as most people will generally take them with them when they leave home. Does the insurance policy offered enable you to cover ‘specified portable items’ and if so, how much will this cost you?
Home buildings insurance
What sort of home buildings insurance are you being offered?
Do these listed events cover your needs?
See the home contents insurance section above. Accidental Damage provides additional cover and means that if, for example, you accidentally damage a wall while moving furniture, your insurance covers this damage as well as for the events listed under the ‘Listed Events’ section. You will usually pay a higher premium for this type of cover.
Repair or rebuilding guarantees
Have you checked them? Some insurers offer guarantees on any repairs or rebuilding carried out by one of their preferred service providers, up to lifetime guarantees. Make sure you check what you are being offered as it will be important when you make a claim and get some work done.
Some general items to consider
Have you checked and compared the excesses on your policy?
The excess is what you pay when you make a claim. As a rule of thumb, the higher the excess, the lower the premium. Make sure you are comparing like for like when you are looking at the premium cost of an insurance policy. Some insurances are cheaper because they include higher excesses. This is fine as long as you are aware of this and understand that when you make a claim you will need to cover a greater part of the claim yourself.
Have you factored policy discounts into your decision?
Insurers offer a range of discounts on their insurance policies relating to things like the number of policies you have with them and how long you have been with them. These can prove valuable, particularly in the long run.
Are you happy with the service options provided?
An insurance policy goes to work for you when you make a claim, so make sure you check out how easy it is for you to claim on a policy, how you are expected to do this and the options available (phone, email, website, etc). A 24/7 claims service is best as events can occur at any time and often when you least expect them.
Have you considered combining policies?
Instead of purchasing home contents insurance and building insurance separately, combined home and contents insurance covers both your home and its contents for a range of events, such as fire, theft and storm damage. Plus, RACV members save 10 per cent on insurance when taking out two or more eligible insurance policies.