Insurance Insurance!
Saturday, December 16, 2006
Clients often ask me which insurance is necessary once they purchase a property.
You can insure almost anything these days, although property owners should consider the following:
Home Building Insurance:
This covers your home in the event of loss. If it is damaged beyond repair this insurance will cover the rebuilding of the house to the amount covered, and will often also cover the expenses of living in temporary accommodation .
Home Building Insurance will cover the replacement of some parts of your house that are damaged, eg. Broken glass, doors etc
It usually also covers you up to a certain amount if someone injures themselves in your property.
Home Building Insurance is a condition of any home loan. Lenders request a copy of the insurance before settlement
Home Contents Insurance:
As suggested, this covers the contents of your home should they be damaged or stolen.
Contents include all items that are not a fixed part of your building. There are usually two options:
General Contents Insurance. Here a total amount is covered, without nominating specific items. Be sure to determine the maximum replacement value of each type of item under this insurance. Eg. Maximum for jewellery, paintings etc
Specific Contents Insurance. This will cover specific items that you nominate to their agreed value
Ensure you choose an insurer with ‘new for old’ replacement – meaning that they will replace what you lost with a new replacement. This type of insurance is not required by lenders.
Landlord Insurance
Depending on the insurer, this insurance can vary.
If your property is rented out, it can cover:
- Both the building and contents
- Rent if your tenant suddenly leaves or doesn’t pay
- Injuries that occur on your property
- Loss of rent if your property is damaged
- Damage caused by your tenant
Strata Title Insurance
If you own a unit or a property under strata title, the building is generally insured by the body corporate. Strata Title insurance covers you for damage to your property that is not covered by the body corporate, like broken shower screens and windows.
It can also cover your rent if the tenant doesn’t pay or damages your property,
When deciding on a policy ensure to check what types of damage the policy will cover eg. Fire, flood, hail, robbery etc
Income Protection
This insurance will pay you a portion of your salary in the event that you injure yourself or become sick and are no longer able to work. The length of cover depends on the term of the contract. This type of insurance is generally suited to singles that require steady income to cover their commitments, but don’t necessarily have many people to support should they pass away.
Life Insurance
This is a lump sum payment that is paid to your beneficiary in the event of your death. Life insurance usually covers income protection also.
What do we recommend?
As a minimum, your home will need to have building insurance. (If you own a property under strata title, it is insured by the body corporate)
We also recommend contents insurance to cover your possessions. This insurance is usually cost effective.
It is also important to assess how you would cope if you were suddenly unable to work. Could you meet your commitments? If not, Income Protection is advisable.
Likewise, if you have a family, we recommend you also explore the benefits of Life Insurance
Who do I use?
This depends on what insurance you are looking for! We recommend you contact a trustworthy Insurance Broker that can compare different insurers with you. If you would like us to recommend you an Insurance Broker, please contact us via the email link at the top of this page.
posted by Daniel Serratore @ 10:14 pm,
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The Author
Daniel Serratore
Daniel is heading up the new generation of Finance Brokers in Sydney. With his fresh approach and "can do" attitude, Daniel has developed relationships with key people within the Sydney lending market which enables him to source great deals for his clients. Daniel is big on customer service and has built his business purely by referrals from clients and other businesses. You can catch him via the email link on the top of this page
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This blog was developed as a resource for our clients and the general public. Although the internet will provide you with many lending providers, I am still to find a resource that shares ideas, tips and general useful info to assist borrowers make the right decisions. Hence this blog was born!
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