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Now is the time to review your insurances

Below is an article from David & Libby Koch published in the News Limited Group on January 24th 2011.

Please call us to review your insurances.

http://www.news.com.au/wade-through-your-insurance-policies/story-fn7kicty-1225993423413

For most people, the value of insurance depends on their experience. If your insurance cover has rebuilt your house, replaced burgled items or provided financial help after the loss of a family breadwinner, then it has been worthwhile.

But if you’ve led a charmed life with no unforeseen circumstances, insurance probably appears a huge waste of money.

The recent floods through Queensland, New South Wales and Victoria have gripped the nation. It’s broken all our hearts to see the loss of life, the devastation and the financial heartache it has caused ordinary Australians.

Just like with Cyclone Larry in north Queensland and the Victorian bushfires, we sat, and we watched, and were thankful it didn’t happen to us.

But what if it had?

What if it had involved you? How would you have coped? Do you have adequate financial safeguards to rebuild your life?

Spend 30 minutes this week (that’s all it should take) digging out your insurance policies, understanding your cover and then matching it to your particular circumstances.

Everyone will be different. A single person with no obligations or assets, and living with their parents, probably doesn’t need any insurance cover at all.

But the breadwinner for a young family, with a house, mortgage and car is in a very different situation.

It’s our individual responsibility to assess the risks we face and it’s our personal responsibility to protect ourselves.

We can understand how a person who has sacrificed luxuries such as a holiday or restaurant meals to pay insurance premiums gets annoyed when others complain about not having insurance cover when they lived the high life on the money they saved.

Insurance companies aren’t charities. You decide on the cover you need and they will pay accordingly.

No cover, no payout. And if you’ve underinsured, you can’t expect an insurance company to meet your entire loss.

Remember, your cover isn’t just with the insurance company you’ve chosen. To reduce its risk, your insurance company will offload part of your cover to another insurance company (called a re-insurer) which may be based overseas.

That’s why insurance companies keep strictly to the letter of the policy.

So as you assess the level of protection needed, there are a couple of important steps.

Assess your risks.

Insurance cover should be tailored to your individual circumstances and risks. If you live next to a forest or river, home and contents insurance should include protection from bushfire and flood.

Not all home and contents insurance policies automatically cover floods. Some specifically exclude it.

Suncorp is the only insurance company to offer flood cover in their standard policy for all types of floods.

Understand what is covered in the policy and the definitions.

The flood crisis has highlighted the need to not only understand what your insurance policy includes but also how the cover is defined.

For example, there is no common definition of a flood and the definitions can change between insurance companies. There is flash flooding, riverine and inland flooding and actions-of-the-sea cover. It is very confusing.

A general rule of thumb is that if the flood damage is caused from the sky above (a storm), you’re covered. If the flood damage is caused from below (such as from a swollen river, creek or stormwater drain), you’re not covered.

Be realistic about the value of the items you are insuring.

Experts say up to 80 per cent of Australians are underinsured.

That is, they’ve insured their car, house or life for less than it’s worth. If disaster strikes, the payout may not cover the value of the lost asset.

With a home, assess the cost of rebuilding and replacing things such as clothes, appliances and landscaping. The final total should be the value of the policy.

With life insurance, the value should cover your obligations (home loan and other debts), along with providing loved ones with a nest egg.

Keep records of what is covered.

Record-keeping is the key to making a claim.

Use your video camera to record valuables in your home or keep a logbook of items covered with serial numbers.

Then put it in a safe place.

Refuse to take no for an answer when making a claim. Even if the insurance company initially rejects the claim, lodge it anyway. Any disputed claims can be referred to the insurance ombudsman or the company’s dispute resolution procedure for adjudication.

[INSURANCE] What you need to consider

1. HOME AND CAR

It’s ludicrous to pay $300,000 for a house and then not insure it it’s too big a risk. If you can’t afford to insure your house or car then you can’t afford to own it. If you want to save money ask if you can reduce your house and car premiums by increasing your excess in the event of a claim.

2. HOME CONTENTS

You may get a discount on your household contents insurance if you buy it in tandem with your home insurance. If you have an existing policy, make sure your household contents cover is up to date and your most valuable items are covered.

3. INCOME PROTECTION

A disability or income protection policy will pay you up to 75 per cent of your current income if you can’t work. If you’re struggling to fit income protection insurance into your budget, don’t sacrifice the quality of the policy. Compromise in other areas.

4. YOUR LIFE

Prepare for the worst and buy life insurance for your family’s main income earner to protect your financial future.

Yearly premiums for permanent life cover are fixed at the age you take the policy out.

5. PRIVATE MEDICAL

Only buy private health insurance if you can really afford it. Despite the horror stories, we have a pretty good public health system.