Have you reviewed your policy or updated your cover in the last year?
What is underinsurance?
As building costs rise and you accumulate furniture, valuables and other goods within your home, it is easy to let the sum of your insurance cover fall behind the true cost of replacing all of your belongings. This problem is known as underinsurance.
Underinsurance might not seem like an issue if you only need to replace a stolen television, but it could be a big problem if you need to rebuild your home and replace its contents after a disaster like a flood, bushfire or accidental fire. The potential cost of this could run into tens or even hundreds of thousands of dollars.
Who is at risk of underinsurance?
People who are most at risk include those that:
- Have not reviewed their policy or updated their cover in the last year
- Have recently renovated their kitchen or bathroom or improved the value of their home through extensions such as adding a patio, veranda or extra room
- Purchased additional furniture or contents like a home theatre system or jewellery
- Live in areas where building costs rise quickly
How can I reduce the risk of underinsurance?
RAC Insurance automatically adjusts the sum insured on building and contents policies at renewal to keep pace with inflation.
In addition, there are some simple steps that you can take to keep your policies up to date and help minimise your risk of underinsurance.
Steps to reduce your risk of underinsurance:
- Understand your policy and the level and value of cover it provides. Our helpful Consultants are available to talk on 13 17 03 should you have any questions regarding your RAC Home Insurance policy.
- Consider any changes or purchases you have made since your last renewal. Have these been added to your policy? For example:
- Building extensions or renovations? These may make an increase in your buildings sum insured appropriate.
- New items of electronic equipment, furniture or appliances? These may make an increase in your contents sum insured appropriate.
- New items of jewellery or personal valuables that you take out of the home? These may be items to add to your personal valuables cover.
- Check your policy sum insured limits and for added peace of mind, consider a personal valuables policy for belongings that may not be covered under standard contents policies or require additional cover. This may include jewellery, watches, sporting and audio /visual equipment, GPS, laptops and video cameras.
Use our home and contents insurance calculators to estimate the replacement value of your building and contents and to check if you have the right level of cover to suit your needs. Call RAC on 13 17 03 to update your level of cover.
What are you covered for with RAC?
RAC Home and Contents Insurance offers*:
- Flood, earthquake and storm cover
- Fire cover (natural and accidental)
- New for old cover on home contents, regardless of age
- Cover for furniture, carpets, household goods, appliances and gardening tools
- Cover for clothing jewellery and precious items
- Cover for tools of trade
- Cover for fences
*Cover is subject to policy terms and underwriting criteria. Sum insured limits apply to certain items. Check our PDS to see if the policy is right for you.