Home and contents cover, like all insurance policies, is there to protect the things we hold precious. When we’re faced with back luck in the form of an accident or natural catastrophe. Or when we become the target of crime.
However, when things do go awry, sometimes the shock can become compounded by an insurance claim being denied. If it’s been a while since you read the T&Cs of your home and contents insurance policy, take the time to reacquaint yourself with your level of cover.
And, to help you zero in on what you need to check for, here is Canstar’s list of the classic insurance mistakes that can leave you seriously out of pocket:
1. Not knowing what you’re covered for
Insurance policies can be a difficult read, full of definitions, inclusions, exclusions and conditions. But you need to do it. Reviewing your policy and knowing what you’re covered for means that, in the event of a claim, you’ll know where you stand.
You might even learn you’ve extra cover you didn’t know about. For example, if you lose an item outside the home.
Similarly, don’t assume your cover extends further than specified in your policy. A couple of exclusions that often come as a surprise, yet are listed in policies, are for gradual damage, intentional damage and items that are not in your home. For example, like skis or bikes stored in a friend or neighbour’s garage.
2. Not having enough cover
Make sure you have enough cover for all your possessions. Your home likely contains a staggering amount of possessions you care about. And replacement costs can quickly add up.
Plenty of providers have online calculators to help you work out what your stuff is worth. You might remember obvious things, like TVs and computers, but don’t forget to count other items, such as kitchen tools, bedding and clothing.
3. Forgetting the claims process if you’ve been burgled
Many burglary claims get denied because people don’t follow their insurers’ claims processes properly. Insurers will require a few things from you, including proof of ownership for your items, their costs, and proof that the crime has been reported to the police.
And be totally honest. If you lie, you could undermine your claim.
Also, remember some policies don’t cover your contents if a robbery occurs during a period when you’ve been away from your home for more than 60 days.
Some insurers will cover you, but charge a higher excess. And some policies require you to tell your insurer if you are leaving your home unoccupied for a long period. The message here: read the fine print!
4. Forgetting you were previously turned down for insurance
Do you have any past convictions, or have you ever been turned down for an insurance policy before? It’s important to be open about this with your insurer. You agree when you sign a policy to be honest and communicate everything your provider wants to know. Failure to do this can invalidate your insurance.
5. Failing to keep records of your possessions
It may seem like a dreary task, but it’s worth taking a few snaps of your items and keeping screenshots or physical copies of their receipts (stored somewhere easy to find!). Upload images and/or serial numbers to your email account/cloud to keep them organised and up to date. It’ll make the claims process a lot smoother if you do make a claim.
6. Not updating your cover
If you do make new pricey purchases, or you inherit something you think is worth covering, consider whether you should increase your contents cover.
It’s too easy to buy a contents insurance policy then forget about it. But if you purchase anything significant, like a TV, new furniture or expensive sporting equipment, check to see that it’s covered by your current policy. If not, you should consider increasing your insured amount.
7. Not taking reasonable care
Locking doors and windows is taking reasonable care. Are you one of those people who leaves doors unlocked when you leave for the supermarket because you’ll only be 20 minutes? If so, it could prove to be a very expensive shopping trip! A lot of insurers will turn down claims if you haven’t taken reasonable care to prevent a break-in.
8. Not specifying high-value items
It’s a classic mistake, being unable to claim for high-value items because you didn’t specify them on your home and contents policy. High-value items usually have to be identified separately, and there are also limits on certain categories. Make sure you identify these, read the fine print on your policy, and update what you need to accordingly.
9. Not shopping around
If you leave it until the eleventh hour to renew your insurance, you’ll be tempted to stick with your current home and contents insurer – regardless of whether they offer the best deal – because it is easier than looking around.
Canstar’s latest research reveals only 41% of people regularly review the level of their home and contents cover. And a whopping 83% just renew annually with the same insurer. Don’t make this common mistake.
Save money and get at least three online quotes. Compare home and contents insurance policies between providers, because there can be a significant difference in both price and features.
Play around with excesses, too. With online quoting, you can easily see which excess options make premiums cheaper. Weigh up the differences between higher premiums and lower excesses, and vice versa. You may be able to save on your premium by increasing your excess.
If you don’t know what options are available, how will you know whether or not there’s a provider and policy that can work better for you?
Canstar makes it easier for you to quickly check how home and contents insurance providers stack up across a range of categories, including: Value for Money, Process, Speed of Response, Ease of Claim, Quality of Service and Communication. Check out the results of our latest research, below.
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