This fact sheet is one of a series that looks at the steps you can take to give yourself the best chance of fixing or replacing your property and belongings if they're damaged or destroyed in a natural disaster, such as a bushfire, flood or storm.
See Fact Sheet 18: Glossary for definitions of words and terms that are in bold text.
To find other fact sheets in the series go to www.InsuranceCheckup.tas.gov.au or visit your local Service Tasmania for an info pack.
Finding the right insurer
When you are looking at buying insurance – any insurance – it's a good idea to look at how a few insurers work with their customers and what kind of cover they offer.
The Insurance Council of Australia offers a free Find an Insurer service at www.findaninsurer.com.au. If you have more complex insurance needs, e.g. you are a landlord, or you run a business or Airbnb, or own a rural property, it might be more useful to find an insurance broker in your area through the National Insurance Brokers Association at www.needabroker.com.au or on 1300 531 073.
Comparing insurance policies
Compare at least three policies
When you're thinking about buying an insurance policy that will cover you against natural disasters, compare at least three policies from different insurers, making sure you understand exactly what would be covered under each policy.
Read the fine print
Carefully read the Key Facts Sheet and the Product Disclosure Statement for each policy you are considering – insurers are required by law to provide these documents which give you important information about what is included and not included under the policy.
Ask questions and seek advice
Call each insurer and ask as many questions as you need to understand how a particular insurance policy will work for you. Don't focus on price alone; start by finding the policy that will best meet your needs.
Some of the things you might check are:
- What risk you are insuring these items 'against' (e.g. the possibility that they are damaged or destroyed in a natural disaster or household accident, or taken by theft).
- Which natural disasters you will be covered for (e.g. bushfire, flood, storm, earthquake, tsunami).
- Which items will be covered (e.g. your furniture, your phone, your computer).
- Exactly what is covered (inclusions) and NOT covered (exclusions) under your policy (e.g. loss or damage due to bushfire is usually covered, while loss or damage due to flood is often not covered automatically).
- Whether extra expenses and costs are covered (e.g. temporary accommodation while repairs or rebuilding takes place, removal of debris, architectural or engineering costs, council costs).
- Whether structures other than your home will be covered (e.g. fences, bridges and driveways).
- If items are covered when they are outside of home (e.g. laptops, mobile devices).
- When the cover in the policy will start – you generally won't be able to get cover if you try to buy a policy when you hear or see a natural disaster approaching.
- What the premium (cost) will be and what the payment options are, e.g. an annual payment, a monthly payment, payments through Centrepay (if you're receiving a Centrelink benefit).
- What you will get from the insurer if they accept your claim (e.g. money to repair or replace the item, or a cash settlement) and whether you will be responsible for some of the cost of your claim (an excess or a deductible).
- What would be the best value insurance for you (e.g. combining home and contents insurance), remembering that cheapest is not always best.
Seek professional advice if needed, e.g. from an insurance broker or lawyer. You can get free legal advice through the Legal Aid Commission of Tasmania at www.legalaid.tas.gov.au or on 1300 366 611.
Avoiding underinsuring your home or belongings
Make sure that the insurance you choose will cover the cost of replacing your home and/or belongings. It's really important to avoid underinsurance, which is when the insurance you have isn't enough to cover all the costs of rebuilding your home or replacing your belongings.
Make a list of your belongings and what they're worth. The Insure it, it's worth it guide available from the Victorian Government's website at www.insureit.vic.gov.au has a list of common household items, and their average value, to get you started on your household inventory.
Many insurers also have online calculators to guide you, or you can use the Insurance Council of Australia's contents insurance calculator and building calculator as a starting point.
For more information and tips, see Fact Sheet 4: What it would cost you to replace everything you own.
Resources
For general information, and for calculators and other tools to help you manage your own insurance:
- Understand Insurance: www.understandinsurance.com.au
- Find an Insurer: www.findaninsurer.com.au
- Money Smart: www.moneysmart.gov.au
Important notice
This fact sheet gives you basic and general information only. It does not cover every situation or everything you may need to know about insurance. It does not take into account your personal circumstances. Make sure you carefully read Key Facts Sheets and Product Disclosure Statements. Ask your insurer as many questions as you need in order to understand how your insurance policy will work for you. Use other tools available to you and seek professional advice if needed.
Information in these fact sheets has been drawn from a number of publicly available Government and non-Government resources.
This project has been jointly funded by the Commonwealth and Tasmanian Governments under the Disaster Recovery Funding Arrangements.