Insurance is a product that you often don’t fully appreciate until you need to make a claim. But, if that time comes, are you sure you’ll be covered for everything that you’ve lost? How do you know beforehand if you have the right level of cover and the right policy for your needs? Here are four points to consider when you go shopping for insurance.
Check that your sum insured is appropriate
A recent report suggests that due to rising building costs, 85% of New Zealand homeowners may not have enough house cover. Whereas previously you could insure your house for a specific size, these days most insurance providers require you to estimate how much it would cost to rebuild your property and to insure it for that fixed amount. To do this, you can hire a registered valuer to assess your home, or you can use an online calculator like the one provided by Cordell. It’s a good idea to do this annually on the anniversary of your insurance policy, to keep pace with the cost of building. The same goes for your household contents and your motor vehicle. Review their value regularly, especially if you’ve made any big purchases recently, and make sure you have enough cover to replace everything at once, if necessary.
Be aware of individual limits within your policy
While your insurance policy will have an overall sum insured, there will be limits on how much your provider will pay out for certain items. These limits will be listed in the policy document, so it’s worth reviewing a copy before you make any decisions. If you have possessions that exceed the policy limits, such as valuable pieces of jewellery, expensive computer equipment, or a high-end car stereo, most providers will give you the option to specify agreed limits for those items, as long as you nominate them when you take out the policy. Note that you may be required to provide valuations for these items in the event of a claim.
Know the exclusions
One of the main causes of disappointment at claim time is thinking you’re covered for something that is excluded. Things like gradual deterioration or theft by a guest may not be insured. Again, reading the policy document before you sign up will prevent any unpleasant surprises later. All the exclusions will be clearly listed.
Make sure you choose the right kind of cover
Many insurance policies offer different levels of cover. If you want all of your property to be fully insured, make sure you choose a comprehensive option that covers everything. Check to see whether it offers brand-new replacement of your items or current market value compensation. Find out what excess you would be required to pay at claim time. If you aren’t going to claim on small losses, you can save money by option for a higher than standard excess. You can also save money by bundling all your policies with a single provider.
Following these four important steps means that, in the unfortunate event of a claim, you have the peace of mind of knowing you’re appropriately covered. If you’d like help to review your current insurance policies, give the team at Certus a call to get advice from one of our experienced brokers.