Are your sums insured adequate?

The large number of claims that the team here at LMI and I personally have looked after –as a result of the bush fires, hail storm and storm events– over the past few months, has put the spot light on the high level of under (and non) insurance in this country.

During the fires, brokers have advised me that clients were ringing up trying to increase their sums insured. Clearly these people knew they were under insured, but insurers always place an embargo on uninsured people trying to insure in the face of a known fire or other hazard.

The building costs in Australia have increased by nearly 10% over the past two to three years, and yet so many insureds simply roll over the same sum insured year after year.

Other issues to consider are the extra cost of bringing your home, or other building up to the current building codes. This can be substantial particularly to comply with Bushfire Overlays.

The other big one is what is called demand surge. This is where the extent of damage pushes up the cost of materials and labour, in line with the basic principles of 101 economics.

Therefore I ask everyone, even those who work in the industry, to check your insurance. Not at renewal, but tonight when you get home. It is really cheap peace of mind.