We all want an insurance policy that suits our needs and budget. So when comparing policies, it helps to keep a few things in mind.
Compare home insurance like-for-like
When comparing policies from different insurers, it can be a good idea to put similar options side-by-side.
Make sure the details you enter are the same from quote to quote. That’s things like:
- the excess
- the contents sum insured, the building sum insured, or optional cover such as AAMI’s Complete Replacement Cover*, which means you don’t need to select a specific sum insured, and
- any optional extra covers that other insurers may offer as part of their insurance cover.
Know what’s included and what’s optional
Not all policies are created equal. One insurer may automatically include something in a policy, while another may list it as an optional extra.
Flood^ cover is a good example. AAMI automatically includes it in all home insurance policies. Other insurers may offer flood cover as an optional extra, which you can add by paying extra on your premium.
Be aware of what is an optional extra, what is an automatic inclusion and what may not be covered at all. It can help to read any relevant policy documents.
Coverage
Home & Contents
Building only
Contents only
Insured events (such as, but not limited to, fire, storm, theft, escape of liquids)
Legal liability
Building structure
Personal belongings
Temporary accommodation*
Removal of debris
Theft or burglary
Motor burnout
Accidental breakage of glass
AAMI Complete Replacement Cover®**
Common home insurance mistakes to avoid
Making decisions on price alone
Choosing a policy based on price alone could lead to headaches at claims time. Some other factors you may want to consider are:
- the company’s reputation
- the percentage of claims that are paid out, and
- the customer experience, from updating your policy to claiming.
Reading reviews is a good place to start. Look for patterns on both positive and negative feedback. This can give you an idea of people’s experience with that company.
Underinsuring yourself
This happens when the amount you’ve insured your building and contents for isn’t enough to cover the full cost of rebuilding, repairing or replacing your home and its contents following an insured event.
These out-of-pocket costs could break the bank. So, before choosing you cover, carefully consider your needs and budget before you decide on a total sum.
AAMI’s Home Building and Contents Calculators can help estimate how much you would need to rebuild your home from scratch or replace all your contents.
We all want our home and belongings protected against life’s surprises.
But what if there is an insured event and the amount listed on your certificate of insurance isn’t enough to rebuild your home or replace your contents?
This is known as underinsurance.
Underinsurance can happen for many reasons:
If your home or contents are not valued according to their repair, rebuild or replacement costs when purchasing or updating your policy.
If you renovate your home but don’t adjust the building value on your policy – also known as the sum insured.
If you purchase new items, like appliances or furniture, but don’t adjust the value of your contents on your policy.
With the cost of living rising, it may be tempting to have a lower sum insured to save money on your insurance premium.
But if you need to claim, your insurance policy might only cover a portion of the repair, rebuild or replacement costs, leaving you to pay the rest.
When it comes to choosing a set sum insured for your policy, there are a few simple steps you can take to help avoid being underinsured.
Use the AAMI Home Building and Contents calculator to get an estimated rebuild cost for your home and estimated total replacement costs for your contents.
A qualified builder can also provide further help with estimating rebuild costs according to current building standards.
Make a list of your belongings to ensure your contents sum insured is accurate. For particularly valuable items, take a photo, note their value, and save any receipts.
Keep this list up to date by adding any new items you purchase for your home.
No two home insurance policies are the same, which means it’s important to read your policy documents.
Knowing what your policy does and does not cover, and any limits that apply, will help give you confidence that you’re covered if you ever need to claim.
With AAMI, you can also choose our optional Complete Replacement Cover for the home building.
Complete Replacement Cover is our best protection against underinsurance as we’ll repair or rebuild your home as it was or pay you the amount of the assessed quote to repair or rebuild it, without you needing to set a sum insured.
And remember, don’t set and forget. As your life circumstances change, so should your home and contents insurance policy.
Regularly review your policy details to ensure your cover is up to date and meets your needs.
Download the AAMI App or log in online to update your policy.
And for other helpful tips, visit the AAMI Informed site.
*With AAMI, if you have selected the optional Complete Replacement Cover with your Home Building Insurance policy, and if your home needs to be repaired or rebuilt after an insured event, we will offer to repair or rebuild your home as it was, or pay you the amount of the assessed quote to repair or rebuild it – without you having to set a specific building sum insured. Learn more.
^Actions or movements of the sea and storm surge are not covered (unless the storm surge damage occurs at the same time as damage caused by storm). Other exclusions apply.
** Delays do not include delays due to any pre-existing damage. The most we’ll pay for temporary accommodation costs due to the delay(s) is up to an extra 5% of the building sum insured, unless your certificate of insurance shows that you have Complete Replacement Cover® option, in which case we’ll pay these temporary accommodation costs for up to an extra 26 weeks.