What is AAMI Complete Replacement Cover?
Many home insurance policies ask you to set a sum insured — that is, a fixed amount for which your home is covered, and which is the most your insurer will pay if you need to claim. But if, for example, there are shortages in building materials, or increased demand for tradies after a big weather event, rebuilding costs can spike. In that case, your sum insured might not be enough. That’s where Complete Replacement Cover can help.
What is Complete Replacement Cover?
Only a handful of insurers, like AAMI, offer total building replacement cover. Our Complete Replacement Cover is an optional cover that can be added to our home and landlord insurance policies. This level of cover can give you peace of mind that we'll repair or rebuild your home as it was — or pay you the amount of the assessed quote to do so — without you having to set a specific sum-insured limit.
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.
Complete Replacement Cover vs Sum Insured Cover
Unlike Complete Replacement Cover, Sum Insured Cover will insure your home to an amount specified by you. It’s standard with most home and contents insurance policies, but can increase your risk of being underinsured — which happens if the cost of rebuilding your home is higher than estimated. If your estimate comes in higher than your insured amount, you may have to dip into your own pocket for your rebuild, or settle for a rebuilt home that’s not quite up to the standard of your old one.
Ways to avoid underinsurance
Underinsurance occurs when you don’t have enough insurance to rebuild your home, or recover your contents, after an event like fire or theft. It’s fairly common, too – approximately 50% of Australian’s don’t have adequate cover for their assets1. If you’re concerned about being underinsured, there are a few things you can do to avoid it:
- Make sure your policy is up to date, and that you know what is and isn’t covered by it.
- Update your policy to include any additions to your home, such as renovations or fancy inbuilt appliances.
- Add Complete Replacement Cover to your policy for an extra premium.
- Assess the value of your home and contents accurately – check out our Home Building and Contents Calculators to get an estimate.
AAMI customers can keep their your policies up to date through the AAMI App. Use it to see your policies in one place, update your details, and make or manage any claims.
How to get AAMI Complete Replacement Cover
Maybe you’ve just bought your first home, or you’re finally living in the house of your dreams after working hard for it. No matter your situation, optional Complete Replacement Cover might be worth considering – simply select the AAMI Complete Replacement Cover optional cover when you get an AAMI Home or Landlord Insurance quote.