Are You Really Insured?

By Greville Pabst on 29 Apr 2013
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Unforeseen events can leave home owners and investors faced with the significant financial burden of an underinsured or uninsured property.

Why Do So Many Property Owners Fail to Protect Their Most Valued Assets?

For the majority, it is simply a case of not knowing what to insure their property for. Many property owners commonly use the purchase price and recent sales evidence as a guide.

However, the cost of replacing an asset can be far greater than the purchase price, resulting in insufficient coverage and, in instances of overestimation, unnecessarily high premiums.

“Choose cover that suits your needs to prevent under or over insuring your assets.”

Get an Accurate Assessment

Insuring a property based on the purchase price also fails to recognise capital growth and ancillary improvements, such as renovations and undisclosed additions, increases in building costs including labour and materials, unforeseen expenditure to ensure compliance with new building codes and professional fees, and the removal of debris and hazardous material.

An accurate assessment of the replacement value of an asset will take these things into consideration. Employing the services of a registered builder or quantity surveyor is a good way to determine this figure.

Chose the Right Cover and Service

When selecting an insurance policy, it is imperative that property owners choose the one that provides the right cover and service.

Many policies have exclusions that owners may not be aware of and which may not provide adequate cover in time of need. Furthermore, property owners should avoid selecting insurance cover based on cost alone.

Choose cover that suits your needs to prevent under or over insuring your assets. Having the right insurance for your home will ensure that your asset and lifestyle are secure in the event of disaster.

About the Author

Greville Pabst is the CEO and co-founder of WBP Property Group. He prides himself on leading a team of more than 100 highly skilled and certified property professionals in the delivery of objective and impartial property advice to Australian property investors. He is determined to help the everyday Australian make smarter property investment decisions.

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