Underinsurance: are you covered if the worst happens?

The last couple of years we have seen an increase in extreme weather events in Australia. While we’re no stranger to droughts, floods, cyclones, and hailstorms, the frequency and ferocity of these events seems to be increasing. Indeed, data from the World Meteorological Organisation is projecting the number of weather disasters will continue to increase until the 2060s.[1]

Regardless of whether you believe this increasingly-wild weather is caused by climate change, the fact is, when heavy weather hits, people’s homes, cars, and possessions can get damaged.

And if you don’t have insurance, or your cover isn’t adequate, you could be out of pocket.

Think it can’t happen to you?

Research has shown that:

  • 13 per cent of those surveyed were without insurance cover for their assets
  • 9 per cent of homeowners are without house insurance
  • 41 per cent of tenants do not have contents insurance
  • approximately 25 per cent of those who are insured may be inadequately covered.[2]

The average uninsured loss for each Australian natural disaster between 2004 and 2011 was estimated to be nearly $1 billion.[3]

The reasons for having inadequate insurance vary according to the individual. Whether it’s because you think the cost of insurance is more than the value of your possessions, or because you’re willing to accept a higher risk, being uninsured means you could face financial hardship if a severe weather event hits.

Choosing not to have insurance is one thing. The worst-case scenario is when you think you’re insured only to find out your policy doesn’t cover you for the event that just happened. So it’s essential to read the fine print and make sure your insurance has you covered.

Working with an insurance broker is the best way to make sure you have the right type and level of insurance. A broker knows the risks you face as well as the potential blind spots in your policy that could see you underinsured. They can help you get the best possible cover at a price that fits your budget.

To find out more about how Austbrokers can help you get the coverage you need, contact us today.

 

[1] http://insurancenews.com.au/international/natural-disasters-will-increase-until-2060

[2] https://theconversation.com/properties-under-fire-why-so-many-australians-are-inadequately-insured-against-disaster-50588

[3] Lloyd’s Global Underinsurance Report October 2012