Q's about contents insurance

[Indadhanu]

Ok, I've never had contents insurance (no need to worry about home and contents as we are renting). SO I don't really know what to look for...

I guess the obvious theft, fire, storm, flood which are the big 4 that scare me the most but...

Is there any 'tricks' an insurer has that might ever stop a claim? Do I need receipts for everything? Should I take photos? How do I keep them safe in a fire or somethig like that?

What generally stops a claim from going through? I don't want to ever be in a position where I THOUGHT I had contents but then find out after any event that I should have done xyz and so I'm not actually covered...?

Yes the floods and fire are scaring the crap out of me. Plus I think its a good thing to have anyway. But mostly the recent floods and fire, and losing absolutely everything with no contents insurance or anything like that is not really a great thought.

[squidipa]

leasha get a vid camera and record all u have. With real expensive items u may have to insure them under a specialty item, Like jewelry more than a certain price or if u own to many dvd's. check for serge protection and if they will cover loos of food like a full freezer of off off. MOST do that but it so is worth looking a round and reading all your policies. As another hint... when we rent we also ring insurance companies and found out there prices and they let us know if thats a high crime area or not.

You can get insurance on items u take form your house like mobiles and handbags sunglasses and jewelery for los of stones.. also check for accidental damage insurance to on your household items.

when choosing your cover amount think about how much to replace EVERY item even the little things like tea towels curtains hair brushes new for old. go around and add it all up pick one room a day and them that's sorta the amount ya want to insure for plus a little extra to cover new buying i that year.

just remember if u loose it all would be a shame not to replace it all cause u have not insured for enough.

DONT be afraid to be on the phone for 1 hour or hours asking all your questions and giving possible scenario's k

[C~Q]

Really think about how much everything would cost to replace, I kept mine down because I thought it would bump the price up but contents is so cheap - mine is $45 a month and thats for a bout $50K I think! We also have pet cover included which is $5 a month and covers the little fur ball if he breaks a leg or something (been there...paid $3000 ). It's so worth it. Ours also covers anything in the car whether the car is at the house or not.

[squidipa]

It's so worth it. Ours also covers anything in the car whether the car is at the house or not.

yes ours covers the pram and baby bag and carseats too so sorta the baby things are double covered hehe

[briggsy's girl]

definitely look for an insurer that has an "away from house" UNSPECIFIED amount of cover. so if you're out and your mobile gets nicked, pram gets damaged etc - the particular items don't need to have been itemised. some make you specify what you want covered away from the property - including their value. with DH being a truckie, the stuff he takes with him varies week to week, so we have a blanket amount that is covered away from home. it really does make life easier.

if you have big collections or unusuallly high valued collections (i have nearly 1000 DVD's, DH has car and truck collections, a massive collection of specialty alcohol) these can go under your general insurance, but it's a good idea to provide a list with values to your insurer. if you have something particularly valuable that is difficult to replace (our hall stand is nearly 200 years old and would be impossible to replace new for old), itemise it.

our insurance is due for renewal in the next 6 weeks i think, and i'll be shopping around. i'm happy enough with who we're with, but it doesn't feel like everything is covered the way it should be. i have family who, until last year, were in the insurance industry and are helping me to find the best cover (and to know what to tell them to make sure we're covered properly)

also, being that you're not on a huge income (hell, sometimes even if you are) - talk about fortnightly/monthly payments. for one, it makes budgeting soooo much easier - for another, i've never been without cover. if i don't make any adjustments to my policy when it's due for renewal, they just alter the payments each month to cover the new policy. i've been doing it this way for about 10 years, and never had my car or contents (and house for about six of those years) uninsured. i don't miss the money coming out cos its not a huge amount each month

[Pandora]

Some insurance companys will not insure you if they view you to be living in "shared accomodation". I know you guys arent but be prepared if the silly person on the phone deems you to be.
RACQ might be different though, I know RACV are one in Vic who will insure without asking discrimatory questions.

If you log on to one of their websites, there is often questionairees on their and even contents estimators tools, that go through room by room to help you put a proper value on your contents.

Clothing is one that people often understimate. I know someone whos house was cleaned out - they cam home and everything was gone, someone had just got a removalist can and taken everything. What they didnt take, were the hangers in the wardrobe. And the insurers based their clothing estimate on the number of hangers in there - so now I always have lots of spares.

Also remmeber you need to insure for how much it will cost to replace the item - which could be more than what you paid.

[Astrid]

if you have big collections or unusuallly high valued collections (i have nearly 1000 DVD's, DH has car and truck collections, a massive collection of specialty alcohol) these can go under your general insurance, but it's a good idea to provide a list with values to your insurer.

Check how much they do cover. I checked mine and they only cover $1000 for DVD's and CDs. So DH is debating whether to contact them and see how much is costs to get a higher coverage for those items.

Oh dear rayray, basing on hangers!! Most of my stuff is folded on shelves, hope they count that.

To be honest when I looked at insurance, I look at what is needed to cover replacing most of the stuff, not all of it. There is really some items that I just would not bother getting again. I know I would not replace all my clothes, dvd collections, books etc I would just want to buy what I need and what I really, really want again. I don't want to be paying a lot extra per year, just to replace items that I am hanging onto because I can't make the decision to get rid of them iykwim.

[Jennifer13]

Also, make sure that you do not underestimate the amount of coverage you need. It is better to be generous! If you are deemed to be underinsured (and you have lost everything) you will not get the full amount you are insured for (every insurer is different on the amount they pay out, but you are penalised). That means, if you have taken out insurance for say $50K, but the assessor thinks it would actually cost $70K to replace everything, then they will only give you a %age of what you were covered for (80% for eg, which would mean a payout of only $40K).

It is better to be generous and even over-estimate, than take a chance that you won't get what you've been paying cover for. It is to stop people under-insuring.

Astrid - I just read your post - please check your policy as it sounds like they would consider that under-insuring!

[Pandora]

If you lost everything - as the person I knew did, they even took rugs off the floor, how would the insurer know what the total contents value was? If it was just by asking you and compainring to your policy, wouldnt you just omit the things you didnt want replaced?

[Astrid]

What is the problem with underinsuring? Isn't that just my problem? If I have $100k worth of items, but only insured for $80k (for example), then that is my loss. I have not come across claims being denied based on under insuring, only when people have tried to claim more than what they actually have. BTW we are fully insured, except the for the $1000 cap on DVDs, that wont cover the replacement of all of them. House rebuilding is unlimited

[Jennifer13]

What is the problem with underinsuring? Isn't that just my problem? If I have $100k worth of items, but only insured for $80k (for example), then that is my loss. I have not come across claims being denied based on under insuring, only when people have tried to claim more than what they actually have. BTW we are fully insured, except the for the $1000 cap on DVDs, that wont cover the replacement of all of them. House rebuilding is unlimited

It varies from insurer to insurer, which is why it is very important to check with your insurer.

I could only find one quote that I've posted here from an insurance company:

What happens if I'm under insured?

When you submit a claim and are under insured, the principle of average will be applied to compensate you partially for your loss.

In accordance with the average clause in your policy, the extent to which you are under insured will be applied to your claim. Suppose your home or house contents are insured for only 50 percent of the replacement value and you submit a claim for $20 000. Only 50 percent of the claim, that is $10 000, will be paid out.

The home loans department of your bank or an expert in the building industry will be able to value your house. [Insurance company] suggests that you ask a reputable dealer to determine the insurance value of your vehicle.

What happens if I'm over insured?

When you submit a claim and are over insured, [Insurance company] will only pay out the replacement value of the insured items.

Say, for example, the contents of your house is insured for $200 000, but it is only worth $100 000. Burglars clean out the house and you claim for the full sum insured. [Insurance company] will only pay out $100 000.

What that means is if you've only insured for half of your contents, you don't get to nominate which of your contents is fully covered. So if only some of your stuff is stolen (TV, DVD, stereo) and the assessor calculates that your contents cover is only for half of what you have, you only receive half the value of what was stolen. Which means you wouldn't be able to replace what you've lost with the equivalent at today's value. So it might not be an issue if you lose ALL of your contents, but actually, it's more likely that you won't lose everything and will have to make a claim for only certain goods, even in a fire. (I should clarify too, that I believe some companies do not pay out the full amount insured if you lose everything and it is considered under-insured. Check with yours.)

Does that make sense?

[Indadhanu]

I thought you weren't allowed to 'overinsure'...?

[Jennifer13]

You can theoretically, within reason, but you won't receive the full amount if you try to claim for everything. So if you say your contents are worth $100K (and you pay your premium based on this) but then the house burns down and everything is only valued at $75K, then that's all you'd get. So it's be a bit silly to pay a higher premium when there's no way you'd get away with receiving what you've asked for.

And since you do have to itemise everything it's actually very hard to try to claim for something that wasn't there. Items of significant value on their own do need to be specified in the policy (hence the caps on things like DVDs, etc, too, to stop ppl trying to say they had a $30K DVD collection to 'make up' the full amount).

Overinsurance is more of an issue though with house or business insurance, rather than contents. By the far the majority of ppl are under-insured, since they don't change their policy when big new items are bought or review it every year it falls due. Or they don't take into account that prices go up with inflation.

[Indadhanu]

But then if you overinsure you're more likely to get a good amount back right? But if you insure for the 'right' amount or less you end up with less if you ever need to replace everything...?
Thats seems like a rather large loop hole...?

[Jennifer13]

The thing is, what most people would consider an exaggeration on their contents is probably more realistic than they think. So yes, I think you would be better off almost over-insuring, 'cause then at least you would guarantee replacement value for your belongings.

We usually don't realise just how much it would cost us to go out and buy new things for what we have.

The thing is, an assessor who comes out and values your goods (once they've been lost/damaged) does it every day and they will apply what they consider market value. If you aren't used to valuing, then your estimate is less likely to be correct. Just because you bought your fridge for $1K, for eg, on sale and got a discount two years ago, doesn't mean that the value of it should go down as $1K! To go and buy the equivalent fridge not on sale as soon as yours is gone might cost a lot more.

Use the online insurance estimators/calculators. Don't leave anything out.

[Karina]

I know with the under-insuring thing it causes issues for huge claims. I work for an insurance company and there was a big pub in QLD that got totally wiped out with the cyclones in 2006 and they were really under-insured. I remember hearing the claims person saying that they didnt pay out the entire claim because of that. I'm talking about a building that was in the $millions to replace/rebuild though - one of those quite large old 2 storey heritage style pubs with a few bars, rooms, and accommodation. Its called averaging provision. Not all insurance companies have this as a condition though, it depends on the underwriters rules so you really need to ask them what would happen in a situation like this. I'm not sure if it would apply to a smaller policy for, say, home contents.

If you overinsure, you can only get back as much as what it costs to replace/reinstate/rebuild what you lost (depending on exactly what your policy is for - replacement and reinstatement are differnt things). Depend on what the assessor or claims adjuster says. Its better to insure your contents for what it would cost if you had to replace it (buy a new one). Like, we've been given things (my mum bought a laptop for me) so that was no cost to ME however, if it got stolen or damaged because of a fire or whatever, it would cost me to replace it, so I'd have to increase my contents to account for that.

[Astrid]

Thanks for that Jennifer. I would call my insurer to clarify what they do in a total loss, but want to wait for a bit so they have time to deal with claims with everything going on. I think DH wants to up it anyway. I just find it a bit silly to insure items that I would not replace, but if I have to insure them in order for everything else to be paid out, then I will. I just don't want to be forced to replace some items (old PC games), in order for the rest of the claim to be paid (I hope I am making sense). I know all about insuring for replacement cost btw.