Hi everyone, I am going to have Home and Contents Insurance with AAMI. So I would appreciate it if you have a better understanding if it is better to have a sum insured or Full replacement cover by AAMI? AAMI makes it look that Full replacement cover is a better option but I am pretty sure there should be drawbacks as well. Thanks a lot and will highly appreciate your replies and experience.
It is actually the opposite in my case.. The Sum insured is cheaper … But Many thanks for your reply. I am also very confused about if Full replacement cover would cover all costs to repair or rebuild the home to the same standard, then why there is a huge difference in the premium of the "Standard" Vs "Above Average" Vs "Top of the Range"? Since we don't set a limit like the Sum Insured then why this option massively changes the premium price for the Full replacement cover?
I’d the sum insured premium is cheaper, they aren’t covering for full replacement cost. Simple maths.
Depends. Sum insured is precisely that. Allows you to dictate but also responsible for people being grossly underinsured.
Full replacement - same standard. Which may suck. I certainly wouldnt want my 1969 house replaced to the same standards.
https://moneysmart.gov.au/home-insurance/choosing-home-insur…
That makes very sense.. many thanks for your reply.. so my parents house is actually modern and newly built with high standards.. so you think the Full replacement cover will be better in my case? … I am also very confused about if Full replacement cover would cover all costs to repair or rebuild the home to the same standard, then why there is a huge difference in the premium of the "Standard" Vs "Above Average" Vs "Top of the Range"? Since we don't set a limit like the Sum Insured then why this option massively changes the premium price for the Full replacement cover?
Yes, if its a new build i personally would go with same standards. This should be cheaper given the inflation in the building industry.
If the build is special in some way - architect designed etc, then sum insured may still be better.
The way houses are built these days that probably wouldn't be such a bad idea having the same standards
pretty sure if you are underinsured the sum insured amount is reduced by the percentage of under insurance.
their values seem stupid with what they recommend, it's like they assume the land is also going to burn down and you need to replace the land aswell.
Many thanks for your reply .. but Sorry I didn't understand exactly what you meant.. what is the relation of the land in this case?… I am also very confused about if Full replacement cover would cover all costs to repair or rebuild the home to the same standard, then why there is a huge difference in the premium of the "Standard" Vs "Above Average" Vs "Top of the Range"? Since we don't set a limit like the Sum Insured then why this option massively changes the premium price for the Full replacement cover?
i just meant that if your house and land is worth 1.5 million and aami recommends that you insure for 1.5 million, even though the land is worth 700k and the house 800k
Got you.. thanks a lot. Any idea about my other question? The huge difference in the premium of the "Standard" Vs "Above Average" Vs "Top of the Range" for the full replacement cover?
@vickiolesen: i think it has what they mean on the website, basically standard would be basic benches and cheap cabinets, and basic tiling
top of the range would be floor to ceiling tiling, stone benchtops, and premium cabinets
Hi everyone, I am going to have Full replacement Home and Contents Insurance with AAMI. But I am very confused about if Full replacement cover would cover all costs to repair or rebuild the home to the same standard, then why there is a huge difference in the premium of the "Standard" Vs "Above Average" Vs "Top of the Range"? Since we don't set a limit like the Sum Insured then why this option massively changes the premium price for the Full replacement cover? Thanks a lot and will highly appreciate your replies and experience.
Think about each CD, DVD, book etc you own. They all add up. You might think they are junk, but you own them and insurance will cover.
Also each camera, computer, laptop, tablet etc.
Each kitchen appliance. Not just cheap ones like toasters - microwaves, ovens, stoves, stand mixers, good cutlery and crockery sets.
Bedroom - good bed ensemble, sheets, blankets, doonas.
Bathroom - good towels sets etc.
It all adds up.
As someone who has recently been cataloguing everything in the house, people vastly underestimate the value of their contents.
This is true, but like half the stuff in my house could do to be chucked out anyway.
It’s not about being chucked out, it’s about replacing.
Let’s say a “normal” kitchen. Toaster, kettle, fridge, stove, pots/pans, cups, cutlery, coffee machine.. it all adds up very quickly
I’ve been doing a whole excel sheet with everything, the receipt details (if I have them), model numbers, serial numbers, photos.. taking forever
Why
I did some of that years ago. Since the first time I’ve decided a ‘lump sum’ based on insurer recommendation. It’ll cover enough stuff to get restarted with kitchen gear, clothing, TV etc. It probably won’t cover everything I’ve ever purchased, but a lot of that stuff is worth nothing to me now anyway.
If I was to do an inventory now, it’d be taking photos around each room while cupboards are open.
having recently been through a claim (for lightning damage that fried a lot of electrical components); it was refreshing to see that my insurance company had replaced everything for their new replacement value - and not taken its depreciated value into account. So in a way my contents were set at what I deemed them to be worth (i.e. depreciated cost) and were replaced at the 'new cost'. So advice would be to be comfortable with setting it a amount you would be happy to replace all the essentials (and then settle for cash and look for them bargains)
Could not agree more - my dad was a plant and machinery valuer and when he and mum did a full list the insurance company questioned them. When they explained, the insurance company agreed that they were right to list and insure properly.
There appears to be a lot of concern about "Standard" Vs "Above Average" Vs "Top of the Range" within full replacement cover.
I'm not going to research all the particulars of the AAMI policy, but one can only assume this is a short cut to get a "full replacement" to one of these three standards without needing to maintain a specific "sum insured" that may be inadequate.
Clearly it requires a level of research into what is meant by these three definitions. Clearly you don't get a high end, architect designed, fully customised, "all Euro appliances" replacement if you've only paid for "standard".
Equally, you can't get that sort of replacement even if you've paid for it, when you've got a run down 80 year old fibro that is at risk of falling down in a stiff breeze.
I'd be very cautious of the insurance AAMI provides - they will likely delay and reject your claim should the occasion arise. Have been battling them for months and about to spend thousands on a laywer for what is realistically a $10k repair.
If ANZ paid 4.9 billions for Suncorp's banking arm (AAMI top tld of Suncorp)
then they will remain ruthless spending big on loss adjusters.
This means if you have a claim they will search for a loophole to either deny payment or at least make you take a legal fight to get what you paid for.
Ask around for your best option. If you live in bushfire area scrutinize every policy!
Drawback is higher premium.