House Insurance? Can a Person Elect to Take The Money as Opposed to Replacing Goods?

stevensx on 13/07/2016 - 16:47
Last edited 13/07/2016 - 16:49

Hi helpful Ozbargain community!

Long story short. If theoretically my house was flooded and the insurance company was happy to pay out (i.e I haven't committed fraud!) am I eligible to make a choice of taking a monetary amount of the goods that were damaged, or must I go to a place like Harvey Norman, replace the goods and supply my insurer with an invoice?

I'm aware that this can be done with car insurance, if you have an old banger that isn't worth fixing and someone hits you you can simply go and get a quote from an repair shop and then the insurer will provide the money, if you choose to fix the car with that or do something else it's up to you.

Is this dependant on what insurer I have? The person on the phone was really unhelpful.

Thank you!

Home & Garden

Comments

  • stralya on 13/07/2016 - 16:59
    +3

    I used to work in the claims division of a large insurer. On most policies, the insurer will arrange for replacement items and will pay for it directly. This is the most cost effective method for them. It depends on what they replace. For large cost items such as TVs or carpet replacement, they will arrange for an equivalent item to be provided. In all likelihood, you will never see what it cost - that is between the insurer and the retailer. The likes of Harvey Norman have their own insurance replacement teams, whose job is to provide replacement items for insurers.

    For smaller items, they will most likely provide you with a gift card with a particular retailer to the value of the goods. They will avoid direct monetary payouts or letting you buy it directly.

    • stevensx on 13/07/2016 - 17:05

      Thanks for your comment. In terms of a stolen laptop / tv etc, is a receipt necessary? If I don't have a receipt than there's virtually no proof that I ever bought the item.

      1. How do they know I ever owned the item? (Couldn't someone lie about perhaps having an ipod stolen when they never had one in the first place)
      2. Do they base the item on market value at the time it was stolen or what it was purchased for usually?

      Thanks!

      • mskeggs on 13/07/2016 - 17:43
        +2

        I made a claim after a burglary years ago.
        I was able to get a replacement current model laptop for the stolen old model.
        I had the docking station for the laptop and possibly a picture of it or manuals. Anyway, evidence of what it was.
        We got store credit to replace jewellery and a bit of cash I think to replace a few minor items (e.g. a leather jacket).

        You can lie about a stolen item, but that is insurance fraud and is the kind of thing you can go to jail for.

      • stralya on 13/07/2016 - 17:54
        +4

        1. Normally, they require some sort of proof that you owned the item - could be a receipt, credit card bill or even a photo taken in your house. If your claim meets certain parameters on the 'potential fraud' scale, it will go to an assessor, who will talk to you or visit your home to try to assess the genuineness of the claim. They may ask for additional proof or a stat dec. Secondly, you would usually have an excess and your future premiums will go up - so it wouldn't be worthwhile for anything less than the excess.

        2. Based on replacement value in today's costs. So if you had an old 5MP camera that you bought for $500 at the time, they won't give you the latest and greatest camera, but something that is today's equivalent of that camera, e.g. a 8MP camera that costs $100. There is a very comprehensive database that lists virtually every model of every electronic product released in the Australian market, their features, original costs and today's replacement product. So, if you tried to lie that you paid $5000 for something that had an RRP of $3000, they would know immediately.

        Their claims model is quite robust and sophisticated, and does catch a lot of fraud. I've done a few rounds to people's houses with the assessors, and the experienced ones can detect fraud a mile away.

      • Geewhizz on 14/07/2016 - 06:02

        Take photos of everything you have of value and store them at drop box or where ever. We were burgled a number of years ago, and they required proof of having owned the items. A pic was quite adequate.

  • chumlee on 13/07/2016 - 17:14

    Sometimes they just give you the value in gift vouchers for a particular retailer so you can buy what you want

  • timthetoolman on 13/07/2016 - 18:01

    We had a claim through AAMI last year who were fantastic.
    They gave us new for old equivalent money for hard to replace items ( pretty much anything that wasn't from JB, Harvey Norman etc ) and then would replace the rest (eg tv, washing machine, fridge ).
    We did get the offer to take a store voucher for the items replaced through JB but it was at a lower rate than normal since they won't be paying as much.
    We also found out the pricks stole our vacuum cleaner after we'd claimed! Ended up just showing a photo that we had it in to show we really did own it.
    AAMI were flawless through this process, would definitely recommend to anyone.

  • cuteseal on 13/07/2016 - 18:22

    I too claimed with AAMI after a break in, and here's my experience:

    • Macbook pro was stolen - they sourced the equivalent latest model through JB Hifi and got me to pick up from the store. I actually wanted a different Macbook model and they gave me a credit for the retail amount and I bought another model.

    • Another Asus laptop was stolen - this was sourced through some other computer company, but the specs were much worse. I negotiated to equivalent specced machine and they were happy with that.

  • voiletmay on 13/07/2016 - 21:05

    I had two very recent car claims and one house insurance claim (carpet replacement) - all with suncorp - they no longer tell you the cost of the repair and you don't seem to be able to elect to get the money anymore. This used to be an option many years ago. They wont even tell you the value of the repairs. The repairers aren't actually allowed to tell you what they quote Suncorp to fix whatever the problem is, so you have no idea.

    Not sure what they do for smaller items.

  • Tuesdaygal on 13/07/2016 - 21:29

    My parents had some minor storm damage to just one room in their house. RACV paid them a lump sum instead of replacing the carpet as they couldn't get the exact match for it. They also gave my parents money instead of replacing slightly damaged blinds. My parents ended up just pocketing the money and living with the 'imperfections'.

    • Euphemistic on 14/07/2016 - 13:12

      My mIL had similar. Carpets damaged by flooding. At the time the carpet wasn't available so they wanted to replace the whole house worth. MIL didn't want new carpet just yet as the grandkids make mess so she collected the moeny and replaced with floating boards a couple of years later.

  • [Deactivated] on 15/07/2016 - 13:22

    In theory, you could theoretically pay me a theoretical $5K to theoretically flood your house :-)
    Wink wink.
    Win win.

Login or Join to leave a comment
Login Join