As storms, floods, fires and earthquakes make headlines across the world, research group Canstar has found that four out of 10 Australians with home and contents insurance have less than $350,000 of total cover, while average national values are more than double this.
Almost 80 per cent of those people feel they have enough to cover their home and contents if their home is totally destroyed, it found.
Finance specialists say homeowners are failing to account for the costs of rebuilding and demolition, or the surge in expensive technology items in homes in recent years.
“I would be very confident in saying people are massively underinsured,” said Canstar group executive financial services Steve Mickenbecker.
“It’s the replacement value of the home and $350,000 doesn’t get very far in this day and age,” he said.
“They insured for an era when the fridge and the TV were the expensive items, and would be underestimating just how much electronic stuff is in the home today.”
The median value of all dwellings in Australia ranges from $383,000 in Hobart to $910,000 in Sydney, according to CoreLogic.
While home and contents insurance doesn’t have to cover land values, it does have to pay for demolition, rebuilding and replacing all items.
Consumer finance specialist Lisa Montgomery said many people did not think they would ever suffer a total loss of property, and instead guessed the level of cover they might need.
By Anthony Keane
See full story at www.adelaidenow.com.au