The single greatest asset that many of us will own is our home, but how much thought has been placed into the current values? Are you adequately insured and will you be able to rebuild your property to the same standard as it was previously if the worst happened?
Some of the costs that need to be considered are:
- Local building codes and regulations—have they been updated, do you need to add additional fire measures to your property, will you need to change the building materials?
- The current replacement cost of your property (excluding land), taking into account any escalation in costs that may occur due to a catastrophe. Builders tend to increase their labour rates when a catastrophe occurs and the cost of building materials also escalates due to the number of properties that need rebuilding which puts pressure on the manufacturers and the ability to source materials.
Some policies do include an “escalation clause” to cover some of these costs
- The cost to remove all the debris from the site and re-level to start again. Consider any hazardous materials that are on site that will need specialist removal.
- Have you included sheds, outdoor structures, pools and outbuildings in your sum insured?
- The majority of policies have an underinsurance clause which determines how close you need to be to the correct replacement sum insured of your property. Generally this is between 10 and 20%, meaning that if you underinsure by more than this “buffer” you will be penalised in a claim. Please refer to your Product Disclosure Statement or Broker for more information on this.
Did you know that after the Blue Mountains fires many people were not able to rebuild their properties due to underinsurance? This was caused mainly by a change in council regulations which has left a number of insured people more than $200,000 out of pocket.
What should you do?
Check with your local council that the building regulations have not changed. Ask the council if you are in a flood or fire prone area.
Every 1-3 years:
Obtain a valuation on your property or at least speak to a builder about current rebuilding costs.
Some calculators that may assist:
Checklist before going away on holiday
- Secure your house – make sure you lock the front door, back door and any access ways into your house.
- Put away your valuables – don’t leave jewellery or precious items out and about. If you have a safe, then it is worth putting your valuables that are not coming with you into a safe or somewhere else that you feel is secure.
- Mow the lawn – Keeping a house looking neat and tidy goes a long way to make it looked lived it. Imagine if your grass is looking a little long when you leave on holidays, can you imagine what it might look like when you return weeks later.
- Lock your windows – If you are leaving home in the summertime, then do a quick walk around the house to check and secure all your windows.
- Turn on your lights – Put your lights on a timer. Nowadays there are even options to control your lights from your smartphone, enabling you to add some random patterns into what light is turned on when to make the activity in your house look less predictable.
- Organise for packages or letters to be collected – an overflowing mailbox or packages that sit on a front porch and haven’t been collected for a few days are a clear signal that no one is home. Organise either for you mail and parcels to be held at the post office or collected periodically by a friendly neighbour.
- Remove your spare key – If you leave a spare key outside your house, just for emergencies, then now is the time to put it inside for the duration of your holiday.
- Unplug electrical devices – printers, kettles, toasters, washing machines and dryers are just some of the electrical devices you should unplug before going away. A good rule is that if an electrical device doesn’t need to remain plugged in, then unplug it.
- Photograph your important travel documents – your travel details, receipts for bookings and your passport are important documents and storing a digital copy can make life a lot easier if you lose them or need to access them.
- Close your curtains – Closing your curtains makes it harder for people to see into your house and be tempted by any of your items.
- Let a friend or neighbour know – If you can, it is good to let someone know so that you are going away, so they can keep an eye out for you on your property.
- Water your plants – a little water before you go can buy you some time with plants and hopefully enable them to last till you are back from your holiday.
- Check your travel insurance – If you don’t have any, then consider buying some.
- Lock the front door – worth saying this again as leaving the keys in the front door or leaving it unlocked can happen.
Going away on holidays is a great opportunity to have fun, create new memories and enjoy new experiences. To make it more enjoyable, a little preparation can enable you to relax.