House and contents insurance is a necessary investment to protect your things and give you peace of mind, but we understand it can be hard to get the balance right between adequate cover and affordability. As life evolves, so do your insurance needs, so it’s essential to review your insurance policies regularly and make necessary updates. By keeping your policy up to date, you can ensure that you’re not overpaying for cover you don’t need while also avoiding being underinsured.
At Moneybox, we’ll help you to review your house and contents insurance annually, when your policy comes up for renewal, and at other key times when it makes sense to review your cover.
When your policy comes up for renewal
Insurers increase policy holders’ sums insured automatically, each year, in line with an imposed inflationary increase calculation by the insurer. This offers assurance that your house cover keeps pace with inflation, particularly if you don’t have the opportunity to review it regularly. However, when inflation is high, the Sum Insured increase can be significant, which has a direct impact on the premium. So reviewing your cover at renewal time is key! For example, if you have a Sum Insured of $1,000,000 + GST and the inflation increase is 12%, your Sum Insured would automatically increase to $1,120,000 at renewal. This might be higher than what’s actually required to rebuild your home and would have a decent impact on your premiums. You can use a Sum Insured Calculator to estimate the cost to rebuild your home.
When you build a self-contained unit on your property
It can be easy to forget to add a secondary dwelling to your existing house and contents policy, or you might even be tempted to leave it off. Don’t! In the event of a natural disaster, the Earthquake Commission will cover up to $300,000 + GST (known as the EQCover Building Cap) per private residential dwelling. So, if you’ve got two consented dwellings on your section, they’ll each qualify for up to $300,000 + GST cover from EQC in the event of a natural disaster. In short, you’ll be maximising potential EQC cover by insuring both.
When you upgrade or renovate your property
Renovations can boost your property’s value, meaning it’ll probably cost more to rebuild should something catastrophic happen. Having the right insurance cover protects your investment and hard work. Chances are, your sum insured will be out of date, so you’ll need to recalculate the cost to rebuild your home on completion of your project. The value of your contents may have risen too if you’ve invested in fancy new furnishings and appliances, and new security features. Learn more about insurance cover for planned and future renovations in our guide to renovations and insurance.
When you purchase high value items
If you’ve purchased valuable items like jewellery, artwork, electronics, or antiques, consider adding additional cover to your policy to ensure they’re adequately protected (known in the industry as ‘specified items’). This will ensure you have the necessary funds to replace or repair your possessions to their previous condition. You can use a Home Contents Sum Insured Calculator to estimate the cost to replace your belongings.
When your financial situation has changed
If your financial situation has changed, it’s time to review your policy – whether it’s due to a pay increase, loss of income, or something else. By assessing your financial situation, we can help you weigh-up potential savings on premiums against having to pay a higher excess. The excess is the amount you agree to pay out of your own pocket when making a claim before your insurance cover kicks in. By opting for a higher excess, you can lower your insurance premiums. But it’s crucial to choose an excess amount that you can comfortably afford to pay in the event of a claim.
Paying your annual home and contents insurance premium upfront, rather than in monthly instalments, could also save you money with certain providers. Just make sure you review the refund policy in case you need to make changes or cancel your cover early.
When was the last time you reviewed your house and contents insurance? Let’s review your current cover and find the perfect cover to fit your needs and budget! Get in touch for a free, no-obligation chat with one of our advisors today.