Apartment car parks and lockable storage cages may seem secure, but these areas are particularly susceptible to theft and opportunistic burglaries.
Property
How to accurately value your home contents
It can be difficult to keep track of the value of the items that you buy and accumulate over time. This can lead underestimating or undervaluing the personal possessions in your home.
When buying contents insurance, whether as a stand-alone policy or as part of a combined home and contents insurance policy, you nominate the "sum insured", which is the amount of insurance you choose to cover your contents. This means you need to understand the cost of replacing your contents, and choose a sum insured that accurately reflects the value of your assets, taking into account how the value of those goods and products can change over time.
The key to avoiding underinsurance is to regularly review your contents insurance policy, with a view to mitigating the risk of financial loss should an insured event such as fire or flood occur, resulting in the need to replace contents.
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Understand why your personal possessions might be underinsured
Most people don’t deliberately underinsure their personal possessions. It's only when the unexpected happens, be it theft, fire or flood, that the true value of replacing the contents of your home becomes apparent.
It's also important to consider the cost of replacing an item as new. For example, your treasured stamp collection might have cost a certain amount two decades ago, but replacing it now might cost you more, or the collection itself may have appreciated in value.
The same applies to items that you might have been gifted or inherited. There’s no replacing the sentimental value of an item, but correctly insuring it can help ease some of the financial burden.
Check today's prices for items
The best way to avoid underinsurance is to calculate the amount of insurance you need for your personal possessions^ and reassess this each year. Consider the cost of replacing all your assets with new products. Even if you purchased items on sale, the replacement cost may be higher now.
Review your content policy annually, rather than simply renew your insurance policy for the same or similar amount every year. Do you have any new furniture, appliance, electronics or jewellery? Have these items appreciated? The cost of replacing a certain product may have increased due to factors such as supply shortages or inflation.
Go room to room in your home - don't forget the garage
Factor in everyday items, such as cutlery, sheets and towels, clothing and footwear when you estimate the replacement cost of contents. These ordinary items can add up if you lose them all at once in an unexpected, insured event.
Your insurer may have a limit on how much is paid for certain valuable items that are part of your general contents insurance. This means you may wish to add an option to your policy to increase your cover for such groups of contents as works of artwork, jewellery or games and movies.
Also check your garage. Do you have things in a secure storage unit that need to be insured? RACV’s home contents calculator^ can assist. It is important to review your policy each year and make sure your contents insurance provides adequate coverage for big-ticket items, such as a piano, new furniture or a big-screen television.
Do you need additional cover for your computer if it leaves your home? These are the types of questions to ask when taking out a contents insurance policy.
Save all your receipts
Keeping receipts every time you buy something new can be a great way to record your item and their value. There are digital tools that enable you to photograph the receipt and enter it into a running record of expenses.
It can also be useful to write down items in each room, creating a home inventory, and including the purchase cost for each.
Consider your most treasured valuables
Depending on your contents insurance policy, certain items such as artworks, jewellery and collections might only be covered for a default amount. If you have an extensive collection or a number of expensive items, you may consider choosing to increase your cover for certain items.
It's also important to be aware of items that aren't covered under contents insurance. Before buying a home insurance policy, check the policy documents for details.
Cover your important possessions that leave the home
You might have insured your favourite watch for its full value as part of your insurance, but did you check to see if your policy covers the item once it leaves your property? It’s important to know whether personal possessions that you take outside the home – such as watches, jewellery, phones, laptops and other wearables – are covered by your policy if they’re damaged or stolen while not on your property.
Pick a home and contents insurance policy
Make sure you read the policy documents for any insurance cover and compare home and/or contents insurance policies before deciding which policy best suits your needs. It’s also important to understand any natural risks your possessions may be exposed to. For example, if you live in a flood zone area, be sure to check your policy to see if that is an insured event.
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 guarantees 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.
