A Hard Lesson to Learn – Please do not Make the Same Mistake
The home was fully insured to cover the full reinstatement of the building and to replace all its contents. Facing higher premiums, the client reduced the building sum insured to a bit less than half and the contents to only $35,000.
The home was destroyed by an accidental fire. Not only does the new sum insured not cover the cost or rebuilding, it will not even cover the market value of the building. Worse still, the policy has a 10% limit as an additional benefit to cover:
- Removal of Debris;
- Architects and Professional Fees;
- Council Fees; and
- Up to 12 months rental of an alternative dwelling while the home is being reinstated.
As this home also had asbestos, the cost of removing the debris will be more than the 20% ($20,000) combined limit for all these often overlooked expenses that flow from a fire, storm or other insured event.
When people say they cannot afford good insurance, I say, where do you find the shortfall should you have a claim and not be fully insured? The saving of, let us say $1,000, has cost these people hundreds of thousands of dollars.
Insurance is not about cost, it is about PROTECTION.
Sorry for getting frustrated but while Steve and I have read the policy and have found a few extra benefits that have not been included in the settlement offer (every dollar counts), it is nothing compared to what has been lost due to the short sighted decision to reduce the sum insured. Thank goodness they did not cancel the policy completely! It is also pleasing that they kept the insurance with a reputable insurer with good additional benefits.
If asked now, I bet these people would have paid 10 times more than they saved to have their insurance right.
Ask yourself, what is the price for peace of mind over your biggest asset!