Not many of us ask ourselves if we’re really insured, we just pay the premium and assume we are. But we all know what assumptions are worth…
Many policy documents have limitations on what is covered. Some items will be excluded completely while others, although covered, might still leave you out of pocket should you need to rely on your insurance. If you take out insurance you should think about things like special collections, unique items or things that you might have that are more valuable than usual.
For those of us who collect rare and valuable items we’re probably aware that we should list them as separate items on our insurance. There are other things though that we ‘inadvertently’ collect over time that can be very valuable to us and that we should consider as well. One of these is audio.
Although we’re buying less and less physical audio products many people still have a sizeable CD collection or even vinyl. According to the Australian Recording Industry Association, CDs still account for a little under half of total music sales in Australia. This means that in Australia we’re still buying a lot of physical audio media! With more than 350 million albums sold each year that’s a huge CD collection that we have. Despite this, not many of us think about insuring our music.
The AAMI product disclosure statement (PDS) has a limitation on “commercially produced audio and video media, and computer and game console software” of $1000. If you’ve got 100 CDs at around $30 a pop then you’re probably thinking that this isn’t an issue. But what about you XBox, DVDs, and computer software? Add these things together and soon enough you see that the $1000 limitation might be a little bit of a constraint and you might not be properly insured.
If you have some music, software and some DVDs you might want to think about whether you should list them on your policy or not.
Outdoor garden areas
Australia is a country where we enjoy the outdoors and embrace it as part of our lives. Quite often this means having a nice deck or outdoor area, furniture and of course a garden. If we are unfortunate enough to suffer from a fire or flood event then our lifestyle can be severely impacted when our prized outdoor dining area is destroyed. Under many policies our insurance may help to rebuild our house but without returning us to the life we enjoyed prior to disaster we might not be rebuilding our home.
Under the current GIO PDS it clearly states that under their basic cover there will be no payment made towards the “cost of replacing trees, shrubs, plants, hedges or garden beds at the insured address” for any damage caused by the insured event. Food for thought right?
Diamonds are a girls best friend right? That is, until, they get stolen. And the nightmares aren’t gender specific either, men often have watches, cuff links and so on. We’re all susceptible to the limits that our insurers put on jewellery cover.
Reading through the NRMA policy documents quickly reveals that jewellery payouts are limited to $2500. Discovering that your insurer won’t even pay the value of your engagement ring or one watch you’re fond of is a sure way to have an even more restless night in bed after you’ve been robbed. Even then, if you raise the limit on your insurance there is still a caveat that says “the most we pay for an individual item is $10,000” meaning you have to be specific if you want that collectible piece covered for peace of mind.
If you take your items outside of your home then have a think about the value. Let’s say you go for a holiday and take your push bike. You might have a $2000 bike with another $500 worth of gear. You may also take your laptop or ipad, add another $500 – $1000. And then there’s your jewellery. All of this is at risk and probably not covered outside of your home address unless yout take out additional coverage.
Allianz states that “if you have personal effects cover” then they will pay for “against accidental loss or damage to your personal effects” anywhere in Australia and provide limited cover around the world.
To really be insured, always keep records
Even if you take out the cover to ensure that you are protected it still pays to keep records of your items. Without these you can have all the cover in the world and it won’t amount to anything because your insurer may still refuse to pay under the terms of your policy.
AAMI say that to claim for jewellery that is worth more than $3000 you must have “proof of purchase that identifies the item plus a valuation by a qualified jeweller or professional valuer”. These requirements vary for the item type and are different for art, watches, jewellery, etc. so be sure to read your policy. And of course, the requirements differ from one insurer to the next.
We spoke to one person that made a claim for an engagement ring that they paid $9380 for but they did not get a valuation certificate, did not take a high quality photo of it and didnt keep the receipt. They ended up getting paid out $7724, more than $1000 less than they paid originally.
Using lockr to store your information in a safe, secure, digital locker, will assist you in the event that you have to make a claim, it’s like having insurance for your insurance. But remember, it’s only useful if you have the right cover in place to begin with. So go check your policy documents and make sure you have the protection you need and make sure that you are really insured.