Recommendation Sought: Home Insurance

Daniel Plainview on 04/08/2016 - 16:25

Hi OzBers,

Recently my wife and I purchased an existing house. Being mid 40's and diligent savers we paid for this outright, so no mortgage etc. Whilst I've always been averse to insurances e.g spending money on preventative measures rather than paying insurance - I tend to think as a 'defensive' strategy insuring the house itself (probably won't do contents) is a good idea.

Rather than getting a bunch of quotes from different providers is there any company recommended by folks? And/or do you know of discounts or promotional periods they might run to hold out to sign up under? e.g I noted Coles Home insurance had a decent discount last year.

FWIW I'd also welcome feedback on this logic…..our property was bought for around $470k in the Coffs Harbour area. The house is mid-80's double brick, 1 acre and in a rural area on top of a hill( so flooding not an issue). If we lost all our contents due to a fire etc - honestly not a crippling blow - so I'll likely pass on 'Contents' pending how much it adds to the premium.

However, losing the house (domestic/accidental fire, lightning strike really the major threat to this) would be a major PITA - hence I tend to think I'll insure only this. If everything burnt to the ground so to speak - I figure $350-400k replacement cost of house - and will insure based on this.

Anyway any feedback or recommendations welcomed.

Cheers and thanks, Nick

PS. KNOWING that fire is likely the main risk I've ensured there's 3 fire extinguishers in the house, several fire blankets and multiple smoke alarms (photoelectric & ionisation + carbon monoxide detectors). Oh and house is relatively low risk structure (double brick, rendered interior walls etc).

Financial

Comments

  • holdenmg on 04/08/2016 - 16:59

    Hi,

    I went with AAMI.

    Don't forget that to rebuild House (without Contents) can cost quite a lot more with GST than it did when you bought.

    Making an estimate will reflect where you live, the size of your home, and the materials and labour you need to rebuild. Also add in costs such as surveyors fees and debris removal.

    • [Deactivated] on 10/08/2016 - 07:07

      We were unlucky we're with AAMI unless.
      27mths after the initial claim of storm water damage to an upper floor, 2 attempt at fixing, 11mths with the supposive fair & impartial Ombudsman, our house is in a worse state (as in much more damage) then when we made the claim.

      My suggestion is ask around town and find others who has suffered a lose & which insurer they used & if they were happy.

      I would make sure you get "New for old" policy
      Also take lots of videos & pictures & keep them up to date every 6mths.
      If you do have to claim, make sure you don't finalise it for a few months, because you will always remember things down the track. One of their tricks is to get you to settle ASAP, since they know you will forget items.

      Remember insurance companies are there to make money, so lower premiums maybe because they don't expect to payout. Also they often have introduction rates, as they know most people are too lazy to change companies each year.

      Check with your bank, as you might be able to get a decent discount via your home loan.

  • lupiter on 04/08/2016 - 17:08
    +1

    Having listened to people being told they would only have 100k to rebuild a destroyed home, absolutely insure the building. All the standard warnings apply: read the PDS and make sure for yourself that your building is covered. Some insurers will sell you insurance that doesn't actually cover where you live, or your house construction. Make sure your insurance covers the disasters likely in your area, such as bushfire, flash flooding, storm damage, storm surge etc. Consider what things that are less than a total loss that you'd like to be able to claim on. If a storm causes a roof leak, do you want that covered? How about the damage done by water leaking in below? What about a burst pipe? Damage caused by animals?

    Your contents is probably worth more than you think. Remember insurance should be at replacement cost. Do an exercise of tallying it up, all your furniture, appliances, clothing, kitchen utensils and even your socks. Even as a student I worked out I had ~20k worth of stuff, I think my contents now are insured for closer to 80k. You might choose a high excess insurance just to cover you in case of total loss of contents, rather than a lower excess where you might be claiming for a stolen TV.

  • mskeggs on 04/08/2016 - 18:31
    +1

    Consider what your land would sell for if you demolished the house. How much extra would you have to add to buy a comparable property?
    Where I live, in a 100 year old timber house, the rebuild cost might be $600k to get similar finishes. But I can buy a similar house on a similar size block for $750k and sell the land for $450k once I clear it ($30k-ish).
    So insuring to re-build value is not appropriate for me.

    Also, with contents, consider you must buy all, or at least many, of your replacement contents at once following a catastrophe. While my tailored business suit cost $200 in Thailand, I'm going to need $400 to buy a suitable replacement at Myer. And the OzBargain deal for my Macbook of $750 now costs $1200 due to currency moves and price rises. And note some items are contents that are costly parts of the house (curtains, rugs, carpets on some policies etc.)

    As a result, I think some level of cover for contents is necessary (although from memory you have substantial cash savings, so may be able to 'self insure').
    My partner's family home had a fire when she was a teenager, and they were less insured than desirable. As a result, being sensible about insurance in my house doesn't work, and we have more insurance than I think we need, but I have never had the catastrophe so perhaps I would change my tune if faced with destruction.

  • Daniel Plainview on 04/08/2016 - 18:47

    Thanks for the replies guys - god info to consider & will do.

    Any deals ever to be had on Home Insurance or is it generally the same price all year around? Like I mentioned earlier I noted Coles had a decent % off the premiums a while back - not sure how that'd have compared as %'s off can be misleading - but unsure whether to wait or just sign up with whoever seems best. :-)

  • kcyw on 04/08/2016 - 19:47

    I am also looking for home insurance. Is it important to get accurate information about the building for quotes? I tried to use https://www.comparethemarket.com.au/home-contents-insurance/ but did not know when the house was built. Where can I find information like this?

    I had a house that was damaged by fire and RACV was good with claim and paying, but their premium is also expensive from what I have seen elsewhere in ozbargain. Are there companies we should avoid that make the claim process especially difficult? or financially unreliable?

  • kcyw on 06/08/2016 - 20:44

    http://www.canstar.com.au/home-insurance/

    Canstar has some useful articles.

    • kcyw on 07/08/2016 - 10:50

      http://www.suncorp.com.au/insurance/home-contents

      Suncorp seems to use the same calculation/website but have a $100 discount upfront. They probably all belong to the same group.

      • tonester on 08/08/2016 - 01:10
        +1

        afaik aami is now the only one offering complete replacement cover (cba stopped a few years ago)

        also unlike aami, suncorp doesn't automatically include portable valuables cover

        • [Deactivated] on 10/08/2016 - 07:17

          Suncorp own a few insurance companies/brands including AAMI & GIO.

          Complete replacement means they estimate what your house is worth. But it doesn't mean they'll actually rebuild it to the same quality & standard.

        • SaberX on 21/10/2016 - 14:26

          I was just looking at AAMI and portable values cover is an optional extra??

          It is somewhat confusing as your contents has unspecified contents - i.e. up to value of your insured sum, specified contents that don't leave house - of investment like nature i.e. jewelry, etc. that have to be specified.

          yet in putting an engagement ring (jewelry) on insurance for proposal sake, I would need portable valuables as it is a 'specified' item and also for taking it outside the home. They would then also list it on the specified contents too, although that seems to be limited to a $1k limit per jewelry. all quite confusing!!

        • SaberX on 25/10/2016 - 13:57

          @tonester:

          Thanks. But you said unlike AAMI, suncorp doesn't provide portable values cover automatically. AAMI doesn't either, you need to pay to add it on?

  • bemybubble on 07/08/2016 - 08:36

    I always use a broker. Their policy wording is broader to incorporate a wider range of circumstances and whenever I have a claim I simply give it to 1 guy and say sort it out.

  • OldBugger on 08/08/2016 - 01:26

    Just went through this. I compared the PDS of the four best quoted insurers. There were interesting little differences between them and it just came down to what suited my circumstances. Their key facts are a good starting point. I went with CBA in the end.

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