Insurance is like a safety net

Insurance is like a safety net, we have it to make sure we have a soft landing if things go wrong. But what if the safety net has a hole in it?

Research conducted by lockr reveals that only 11% of people keep a home inventory. The most interesting thing about this statistic is not that around 9 out of 10 people don’t have a home inventory but that twice this number of people have been robbed.

Our research reveals that 1 in 5 people have been robbed. If that’s not scary enough, when you ask around, almost two thirds of people know someone that has been robbed. Only 38% of us have not been robbed or don’t know of anyone that has. Some people might be willing to accept those odds, 2 out of 5 isn’t bad! But that’s just robberies. When other events that result in claims on home insurance policies are included the number rises dramatically and you soon see that the odds are not so favourable.

It is important to have a home inventory so that if you do suffer from an event that results in you making a claim you receive what you’re entitled to. Keep in mind that you don’t want your inventory to be destroyed with your possessions so keeping it online with lockr is a good move too. And in the case of a fire, flood or similar event that destroys everything the importance of being properly insured is really highlighted.

For smaller claims where a few items have been stolen or damaged your insurer will often ask for details of those things. Keeping records of them in the form of photos or, better still, proof of purchase with price information will assist you in making a claim. On average, those with a home inventory will receive approximately 20% more on their claim because they can demonstrate the value of their lost items more easily.

“Insurance claims are rising in value”

The value of insurance claims is rising, are you prepared?

The value of insurance claims is rising, are you prepared?

The Insurance Council of Australia notes the value of claims has doubled over the last 10 years. This point is particularly relevant when you consider that CPI hasn’t doubled in the same period which suggests that people have been accumulating higher value items over this period. While this shows that we are becoming more well off, which is a positive thing, it is also one of the leading contributors to under insurance.

Under insurance arises when the total value of your insurance is not enough to replace all of your belongings should you lose them. Some people under insure on purpose figuring that they won’t ever suffer a complete loss and so it doesn’t matter but even then, it might make a big difference.

Insurance contracts may contain averaging provisions that reduce the sum paid out should you make a claim. If the insurer suspects that you have underinsured by 25% for example, they may only pay $7500 if you make a $10,000 claim.

So if you employ this strategy or you’re just under insured because you haven’t updated your policy to reflect all the new items you have, you might want to reconsider your options.

A home inventory can help here. It quickly becomes apparent how much value is locked up in items around the house that we don’t consider every day. Take the draws in your kitchen for example. Many of us have that draw that’s full of tongs, cheese knives, egg rings and a raft of other bits and pieces. When you stop and think about it, that draw probably has around $400 worth of stuff in it. And what about the other draws above and below it?

By doing a home inventory we are forced to consider all of these things along with the obvious. Our TV, computers, tablets, cameras, and so forth will quickly add up into the thousands. On top of that add on things like clothes, furniture and those kitchen draws together with the big ticket items that we often miss like washing machines, dishwashers and fridges and you soon see that your worth sky rockets.

“Imagine the worst, what if you lost all your stuff”

Will you have enough insurance if your things are destroyed?

Will you have enough insurance if your things are destroyed?

Now imagine the worst. What if you lost all that stuff? Would your insurance cover it? And even if it did would you remember what you had? Again, a home inventory helps here too.

By having a list of your things you can settle your claim quicker and return to normal life sooner. In fact, research shows that people with a home inventory often finish with their claim in half the time of those that don’t.

As the Insurance Council of Australia says, “insurance can’t stop a disaster from occurring, but appropriate cover will help you get back on your feet if a disaster strikes”. And having a home inventory is a good way to make sure that you have the right insurance in place.

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