• Guide to choosing the right Home Insurance

    Posted on 27 March, 2013

    Many home purchasers are encouraged to arrange home and contents insurance through the financial institution providing their mortgage finance. Finance institutions act as authorised representatives of a nominated insurance company and earn a commission for the sale of insurance products. These Institutions cannot legally provide advice about the most suitable policy for their borrower as they are not licensed insurance brokers. So it might be convenient to arrange cover through the financier but at what cost if a major claim is excluded because they have the wrong policy!

    Direct insurers advertise strongly in the media promoting cheap Home Insurance products online or through call centres relying on the ignorance of consumers about the complexity of insurance contracts to sell them products which offer cut down coverage to reduce the premium cost of policies. For example, Temporary Accommodation Costs cover following major damage to a home building can vary from No cover to usually 10% of Contents sum insured. Good policies provide up to 20% of Contents cover. Jewellery cover at home is often limited to $1,000 or $2,000 whereas good policies cover unspecified items of jewellery up to $5,000 each. Money cover is often limited to $200 to $500 but good policies cover money up to $1,000 at home.

    There are two types of home and contents insurance policies available – the standard Defined Events cover which only insures the events listed in the policy and excludes everything else and the Accidental Damage policy which covers all accidental loss, damage or theft incidents unless specifically excluded in the policy. Direct insurers, if they offer an Accidental Damage policy at all, usually limit the coverage provided to the home premises whereas good policies provide worldwide coverage for all contents temporarily removed from home – subject to some cover limitations.

    Before you change to a new insurer offering premium savings, make sure you check their Product Disclosure Statement to ensure it provides the same coverage as your current policy. Also you would be wise to check with your current insurer whether they have alternative products available which might suit you better.

    Unlike most insurance brokers, Donnellys welcome enquiries about home and contents insurance and provide free professional advice about our exclusive policies underwritten by a range of major insurers which provide over 30 additional coverage benefits.

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