Sum Insured
The sum insured is the actual amount you’re covered for and is the most you can claim for any one incident unless stated otherwise on your policy.
Depending on your policy, you’ll have either a home building sum insured (except if you have AAMI Complete Replacement Cover), contents sum insured, or both.
You choose the sum insured when you first purchase your cover and can change it during your period of insurance if you need to. Your Sum Insured will be noted on your Certificate Of Insurance.
As the price of repair materials which would be used for repairs increases, so does the cost of repairs overall. To protect you against the risk of underinsurance, we may choose to adjust the home’s sum insured at the end of your period of insurance. This is also to account for various factors including inflationary trends in building materials and labour costs. However, you still need to consider if the sum insured is suitable to you.
This means the sum insured may need to increase when renewing your insurance to provide the same level of cover, otherwise there is a risk of underinsurance.
Location
Your location plays a big role. In some areas of Australia, natural disasters or severe weather events may happen more often, which translates to a higher premium for that location.
Areas with higher levels of theft, vandalism and other incidents will also affect your premium.
Property characteristics and building materials
Your premium may be affected by things like:
- the building’s age
- the building’s size, and
- the construction of the building.
The materials used to build a home will affect the premium charged, particularly the roof and walls.
Weather events
Weather events like fires, floods and storms are getting more severe. This means that the cost to rebuild homes and replace contents following these events may be changing, and that’s then reflected in your premium.
This change is so that insurance companies can continue to help Aussies recover after severe weather events.
Claims
The total number of home claims across Australia which we receive may cause premiums to change.
If big events occur, like massive floods or fires during hot summers, and we need to assist in the repair or rebuild of thousands of homes, then future premiums may be impacted.
That’s so we can provide continued support to Aussies when they need it.