Home insurance for beginners
Like most Kiwis, your home is probably your most valuable asset. So the obvious way to protect it is by having an appropriate home insurance policy. While a key driver can be often be cheap home insurance, there are three other important factors to consider that may actually save you both time and money in the long run.
Check out the policy benefits
Home insurance gives you cover for the big events such as fires and floods, burglary and vandalism, as well as the smaller accidents like broken windows and a burst pipe.
Specific benefits: AA Insurance has introduced Replacement Cover to give you greater peace of mind. In an event other than a natural disaster, Replacement Cover is used to rebuild your home, even if it costs more than your Sum Insured. You may also want your home insurance to include temporary accommodation for you and the people you live with should you need to move out during repairs. Then there are optional benefits that may save you money in the long run, like Excess-Free Glass Cover (think kids playing cricket in the back yard).
Sometimes, the more insurance policies you have with one insurer, the more discounts you may be able to accumulate, such as AA Insurance’s multi-policy discount for customers with two or more polices.
Then there’s the legal liability component of your home cover. So, if you accidently cause damage to another person’s property – for example when painting your home, you accidentally drop your paint tin on your neighbour’s car damaging it – the legal liability component of your policy would cover this accident.
Work out your Sum Insured
The amount your home is insured for is an essential factor, particularly at claim time. In the event of a natural disaster, your Sum Insured is used to repair or rebuild your home. This means getting the Sum Insured, or rebuild value of your home right for your circumstances – after all, you don’t want to have to foot the bill for extra rooms, garages or decks that you’re not covered for.
If you under insure your home to help keep the premium down, this can actually be false economy, especially when the cost for the right coverage may surprise you. For example, for every $100,000 an AA Insurance customer increases their Sum Insured, on average, there is a difference in their premium of around $40.
If you need help deciding on the rebuild value of your home, try using AA Insurance’s free Cordell Online Calculator.