Your home is your castle, so your castle deserves the right protection.

By Abbie Wilson    January 29, 2020

So, you’ve just paid your deposit on your new home, so now is the time to purchase your next investment…. Home Insurance!

If you’re searching for your dream home, you also need to search for your dream home insurance policy.

It is recommended that you have your home insurance in place when you exchange legal contracts and pay your deposit as this is when you begin to have a financial interest in your new property.

Although there’s no current law that requires you to have home insurance, you cannot rely on the current homeowner to have current insurance in place, let alone the right level of insurance. Your bank or financial lender may also require you to obtain home insurance coverage before they will agree to release the finance and allow your new home purchase to settle on your expected settlement date.

Home insurance not only protects the mortgage lender’s investment but your new long-term investment by providing the adequate insurance coverage required to repair or rebuild your home if it is damaged or destroyed by a fire, flood, storm, or another insured event. It is vital to remember that the price you paid for your home and the cost to rebuild it today are two totally different things.

Underinsurance will always be an issue and ongoing concern in many parts of Australia so if you are buying in a high-risk bushfire or flood area it is highly recommended that you engage a qualified and registered builder to ensure your sum insured on your building will be adequate enough to fully rebuild in the event of suffering a significant partial or total loss of your home. We also recommend clients use Home Building Calculators to also determine what the minimum rebuild estimate would be.

After you have determined what the real rebuild cost would be you can purchase home insurance from a qualified insurance broker who can tailor your insurance policy to suit your own requirements and also ensure the mortgage contract obligations regarding insurance are also met.

Insurance should never be thought of as an expense or just another utility bill, rather a valuable investment. There are many ways you can save on your home insurance without cutting corners and this too is something your insurance broker can assist you with. Insurance is all about managing risk – and your risks will change when your circumstances change.

After all, if the worst was to happen, you would still expect a roof over your head. Without the right insurance this will not be possible and your bank or lender will still require you to repay your mortgage.

 

General Advice Warning
This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

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