INSURING YOUR HOME
What does underinsurance mean?
Underinsurance occurs when the sum insured on your insurance policy — that is, the amount listed as the maximum we’ll pay out if you make a claim — isn’t enough to cover the full cost of rebuilding, repairing or replacing your home and its contents.
If you’re an Aussie homeowner, you may not have enough insurance to cover you in a disaster. There is research from MCG Quantity Surveyors which says that 66% of homes are underinsured.
How you may be at risk of being underinsured
It can be hard to know whether you’re underinsured — many homeowners don’t know the true value of their home. Here are some ways you can wind up underinsured:
- Miscalculating the value of your home and contents.
- Not accounting for things like the cost of removing debris after an incident.
- Lowering your premiums without careful consideration.
- Increased repair costs due to inflation.
- Spikes in repair costs thanks to materials increasing in price or high demand for construction services after a major event.
Inflation and sudden price spikes may seem out of your control, but there are ways to minimise their financial risk. GIO Home Insurance comes with Safety Net Home Protection, so that if building prices surge, you’ll have an added financial buffer. Under Safety Net Home Protection, we’ll cover you with an additional payment on top of your sum insured if the cost of repair or replacement exceeds your home sum insured.
How much we pay will depend on your level of cover. Safety Net Home Protection is automatically included with:
- Classic Extras policies, for up to a further 25% of your sum insured.
- Platinum policies, for up to a further 30% of your sum insured.
If you hold a GIO Classic Home Insurance policy, you can add Safety Net Home Protection as an optional cover for a small additional premium. We’ll then cover up to a further 25% of your sum insured.
How to avoid underinsurance
Research your policy
Not all insurers have the same idea about maximum limits and what counts as your contents — for example, wheelchairs are sometimes excluded. So it’s crucial to read the fine print.
GIO does, however, cover wheelchairs and other items that are classified as vehicles, watercraft or aircraft pieces. This includes mobility scooters, golf carts, surfboards, kayaks, toy planes and more.
For specific info about what GIO does and does not cover, refer to our PDS.
Review your policy
Certain renovations may increase the value of your home, and how much it would cost to rebuild — so if you don’t adjust your sum insured accordingly, you could be left underinsured, especially if it’s been a while since you purchased your policy. If you do anything to your home that could affect the sum insured you need, let your insurer know.
Spending more on premiums right now might feel like a pain. But it may be worth it to avoid getting stuck with hefty out of pocket costs at claims time. According to best practice, at least 90% of your rebuilding costs should be covered by your insurance policy.
If you are getting work done, remember that GIO doesn’t cover loss or damage caused by building alterations. The same goes for any loss or damage that occurs during the renovation process. Ensure that your builder has the appropriate insurance before work begins.
Meet Jim and Kate. With a growing family, they decided to move house and are now looking for the
best deal on their home insurance... but it’s all so confusing!
Sound familiar? Here are our top tips that every home insurance customer should know!
Valuing your contents correctly is important:
if they’re overvalued, you’ll pay more than you need for your home insurance premium.
If they’re undervalued, you could be caught short if you need to make a claim.
Imagine trying to replace your furniture with only half the money that it’s worth!
To get an accurate idea of the value of your contents, jot down your assets and keep
digital records of receipts where possible. With GIO Home Insurance, you can choose to
adjust your excess which then impacts your premium: pay a higher excess when you claim
and a lower premium, or a lower excess when you claim and a higher premium. It’s up to you!
While home insurance can provide coverage in an insured event,
prevention is always better than cure. Keep your house safe and secure by
checking your fire alarm regularly, locking windows and doors when you’re out,
and consider installing a security alarm. It won’t just help to deter burglars,
But, in some situations, could also save you money on your insurance premium… win-win!
Did you know, if you hold three or more eligible policies with us,
you’ll enjoy a 10% discount on your premiums? Eligibility criteria and exclusions apply.
Head to our Ways to save page to find out what other discounts
and benefits you might be eligible for! There’s no guarantee that everything will be
covered. You might find the additional coverage provided by our ‘Safety Net Home Protection^’
useful. It provides a financial buffer if the cost of repairing or rebuilding is more than
what you’re insured for, for example, if your home needs to be rebuilt or repaired because of a fire.
While it might be tempting to go for the cheapest option, it’s important to compare all levels of
cover, and make sure you’re across any terms, exclusions and limitations in your policy.
GIO has three levels of cover, so why not compare them today and choose the best one for you…
or complete a few steps to get a quote – it’s quick and easy!
When it comes to home and contents insurance, it’s good to know you’re covered with GIO.
Head to gio.com.au for more info on Home and Contents Insurance.
Remember, the price you paid for something isn’t necessarily the same as the cost of replacing it. Try our Building Calculator to help you estimate your sum insured.
If you’re still in doubt, speak to a licensed builder or professional.
And remember, your home is likely the most valuable asset you’ll ever own. Therefore, it’s the most important asset to properly insure, especially considering how common storms, fires and floods are in certain parts of our country.
- How much should you insure your home for?
- How to calculate your home insurance
- Will home and contents insurance cover a home office?
Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Consider the Product Disclosure Statement before buying this insurance.This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. The Target Market Determination is also available.
The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.