10 things to know about property insurance

1.   How much should you insure your property for?

The value that will enable your home to be replaced in the event that it becomes lost or damaged. If an underinsured property is destroyed, the insurance policy will offer no capacity to fully replace it.

2.   What are the common mistakes made when people are insuring?

Underinsuring. In 2005 the Australian Securities and Investments Commission estimated that 70% of Australian homes were underinsured.

3.   How can you avoid underinsurance?

Compile an annual list of all home contents and their replacement values and adjust cover accordingly. Also ascertain the rebuilding costs for your property, taking into account any renovations or home improvements.

4.   Are all insured properties automatically covered for flood damage?

No. Also be aware that the definition of flood can vary widely. Insurance policies are precisely worded to ensure that the holder understands exactly what they are and aren’t covered for.

5.   What risks may be encapsulated by the term ‘flood’?

Damage caused by flash flooding, storm water, rainfall runoff, as well as rivers, creeks, or the overflowing of artificial catchments. It may also include the effects of storm surge events.

6.   Do insurance policies cover damage linked to climate change?

Mostly not. The coastal risks of storm surge, coastal erosion and gradual sea level rise are presently excluded by many general insurance policies in Australia.

7.   Can home security affect your insurance premium?

Yes. Insurers assess the risk of crime against your property and may offer premium discounts of up to 15% if the property is protected by a number of key security measures.

8.   What type of home security measures do insurers require?

These include things like a back-to-base monitored alarm system and double locking deadlocks professionally fitted to all doors. Professional security screens and bars fitted to doors and windows may also result in a discount.

9.   Are all insurers the same?

No. There are currently 111 general insurers licensed to operate in Australia and their products differ considerably in terms of coverage, terms and conditions, exclusions and costs.

10. How long do insurers take to determine a claim?

General insurance companies have 10 business days from the lodgment of claim in which to advise a policyholder of an initial assessment.