Christine here from Smarter Property Investing – coming to you today from Darwin, smack bang in the middle of monsoon season, it’s humid, hot & sticky, which got me thinking…would my insurance cover a complete rebuild?
Today I’d really like to talk to you about insurances, you know the devil is in the details. We don’t really want to pay it, but when we need it we really need it. So insurance…why would I be worried about it today?
I’ve had a few conversations recently with clients and we’ve been talking about how building prices & material costs have increased substantially over the last 24 months and they look at me with concern on their face and ask “Christine, would my insurance cover a complete rebuild?”
Should their insurance policy be increased? Should they be thinking about what their property is insured for? Or should they just let the insurance company do the CPI thing?
And for those of us who didn’t take economics CPI stand for Consumer Price Index – sounds scary, but it’s not.
Well the conversation went a couple of different ways…The first thing we started to think about is if there was a fire or flood and their home had to be demolished & rebuilt – did their insurance cover the demolition portion of it? Demolition can be a $75,000 fee on top of a new build contract.
So demolition needed to be taken into consideration, the next thing we looked at was what the original insurance policy was taken out for, and in today’s world, what would it really cost to rebuild the property whether its owner occupier or an investment property.
When we started looking at new build prices and new build contracts, we were really shocked that it could be anywhere from $50,000 to $100,000 MORE than what they were actually insured for.
So the hint & tip here is, it’s a wise decision to review you policy every 24 – 36 months in relation to what the property is insured for. What the last 2 years has taught is that something happening on the other side of the world can effect us on our door step…we all saw the empty Kmart shelves!
If you have any questions about this we have a fantastic broker that I personally use & recommend to my clients who would be more than happy to give you a quote, have a look at what your currently paying, who you are insured with, and the amount your actually insured for etc.
It doesn’t matter who you are insured with, it’s really good to have a comparison as it’s in the hidden figures that you’re not generally covered.
I am happy to have a chat with you, 1300 736 754 to talk about this and how relevant it is to you. As an owner occupier you add it to your expenses when budgeting, and as an investment property owner it 100% tax deductible.
Should you be asking your self “would my insurance cover a complete rebuild?”
So let’s have a chat! Talk soon – Christine from Smarter Property Investing