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Home Insurance

Why house insurance premiums can be deceiving

Not all Home and Contents insurance policies are created equal, with the rising cost of living and inflation predicted to hit 7.2 percent, many homeowners are looking to tighten their belts when it comes to premiums paid. But basing your decision on the lowest house insurance premiums can be risky business come claim time.

Brokers and policyholders have watched premiums rise an average of 16-20% as a result of significant events that have occurred over the last 12 – 18 months. EG, 2019/20 bush fire season, 2021 storms and the uncertainty that came with COVID-19.

In Australia, there are two types of home and content policies offered -generally they can be categorized as Accidental Damage and Defined Events.

Defined event policies are a budget offering from insurers that offer cover for common events like fire, theft, and storm damage, but may not cover certain flood events, or accidental damage (breakage, heat damage motor burnout etc).

Accidental damage offers a higher level of cover and will cover the common claim types. Dropping your plasma will not be covered under a defined event policy, likewise, a hot pot damaging your bench, and what about a cricket ball through your large lounge window.

Also, with Defined Events policies, the onus is on you to prove the incident being claimed is covered. Whereas for Accidental Damage policies, it is the insurer who must prove that there is not a valid claim.

As brokers, it’s breakage and accidents we see most commonly with home insurance policies. They are smaller but are often more than the annual premium charged for the policy

How Insurers Offer Reduced House Insurance Premiums

As well as only offering defined events policies to reduce premium some insurers will;

  • Quote using higher excesses
  • Use sub limits on claims
  • Leaving high claim events off the policy
  • Insurers with poor claims ratings often offer lower premiums
  • Offer flood as an add on option

In the unlikely event you do need to make a claim, it’s better to have an Ausure broker consider your risk and leverage their experience and understanding of your policy. We work with you to ensure you are not underinsured; it can cost more than you think to rebuild your home.

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General Advice Warning: Please be aware that any advice that may have been given or implied is general advice only. We have not taken into consideration your individual needs, objectives or financial requirements. Before deciding to purchase a financial product, you should consider the appropriate Product Disclosure Statement to ensure the product is suitable for your needs.

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