We’re not strangers to wild weather here in Brisbane, with our corner of South East Queensland being subject to heavy storms, blistering hot days and strong winds. We hadn’t experienced a tropical cyclone in over 50 years, though, so Cyclone Alfred was a scary weather event that pushed us into a state of worry and preparedness unlike anything we’ve seen before.
We were ready for whatever the cyclone brought our way. However, many who found themselves in Alfred’s path found that in one aspect of preparedness, they were too late.
I’m talking about insurance coverage. The impending cyclone had people scrambling to check their insurance coverage, and many found it was insufficient for the havoc they were expecting. Here’s the thing though – by that stage it was already too late. The cyclone warning had already been issued, and many insurance providers had put in place an embargo preventing changes to existing policies or new ones being taken out.
Those who didn’t have the right cover in place had to just hope for the best. That’s a stressful position to be in. It highlights how important having not just home insurance, but the right kind of home insurance, in place at all times.
Today I want to take a closer look at why home insurance is a non-negotiable, essential safeguard for your family home and your investment properties.
The Cost of Going Without Insurance
It’s so easy to jump on the ‘it won’t happen to me’ bandwagon. Sure – maybe it won’t. Maybe! In Brisbane though, we have wild weather. It’s part of life here. If it’s not a cyclone, it could be severe hail damaging your roof or solar panels, floods or wild winds knocking down structures.
If you don’t have insurance, events like these can lead to financial ruin. There’s the cost of repairs and replacements to consider, plus temporary accommodation and living arrangements. According to the Insurance Council of Australia, extreme weather events cost Australians upwards of $4-billion in claims. You don’t want to be paying for a portion of that damage yourself.
If you’re an investor, you’ll have repair costs but also lost rental income if the property is left uninhabitable. It’s easy to see how an underinsured or uninsured property can turn into a financial nightmare!
What is an Insurance Embargo?
An insurance embargo is commonplace in the industry. If an event such as fire, flooding, or in our case, Cyclone Alfred, is imminent, insurers place a pause on people taking out new policies to cover the risk posed by that event. They will also often pause changes to existing policies that would provide extra protection against the imminent risk.
This is a means of protecting providers from people taking out last minute insurance policies, and then cancelling them once the risk has passed. Once the event is over, the embargo is lifted.
The lesson here is that you cannot wait for a cyclone to be nearly upon you before you take out insurance. You need to have it in place at all times – that’s the only way to effectively manage your risk. Secure the right policy and be prepared – the peace of mind is amazing, and you could be saving yourself from huge financial headaches down the track.
What Should Your Home Insurance Cover?
All home insurance policies are different, and often it’s only when you make a claim you realise exactly what you’re covered for. We’d recommend taking a deep dive into your policy at least once a year to make sure it covers what you need. Here are some things to consider when you’re doing that:
Storm and Cyclone Damage: This should cover damage caused by strong winds, heavy rain, and flying debris.
Flood Cover: Many policies exclude flood damage or require additional coverage. See what is on offer from your provider. Always check to see if you’re in a flood prone area too, and what this means for your insurance.
Fire Protection: Depending on where you live, bushfires can be a threat. They’re not the only cause of housefires though, so take a close look at what your policy covers.
Water Damage and Leaks: Not all policies cover internal water damage from burst pipes or roof leaks, so check the fine print.
Temporary Accommodation Costs: If your home is uninhabitable, will insurance cover the cost of alternative housing?
Landlord Insurance (For Investors): Landlord insurance can protect you from tenant-related damages and loss of rental income on your investment property/
Contents Insurance: Your home structure might be covered, but what about your belongings? Contents insurance protects the valuable items inside your home.
Other Insurance Review Points
You can’t just ‘set and forget’ your home insurance. Risks change over time, and the provisions you were comfortable with a couple of years ago may not be relevant today. Here are some other important questions to ask when reviewing your policy:
- Does your coverage reflect the current value of your home and assets? You want to make sure your home is valued for the correct amount. I can help you with that by performing an appraisal on your home to establish a current value.
- Have you renovated or upgraded your home recently? You may need additional coverage if you have.
- Are there any exclusions you weren’t aware of?
- Are your excess payments reasonable, or would they be a burden in an emergency?
Don’t Leave It Too Late!
We’re not insurance experts here at The Henry Wong Team®, so we won’t claim to know the answers to all your insurance questions. We are connectors however, and we have a huge network that includes several insurance professionals. If you’d like us to connect you with the right expert, we’re more than happy to oblige.
We’re also available anytime to perform an appraisal on your property so you have the correct value to base your insurance on. And of course, if you have any questions about real estate in Brisbane, me and my team are here to help and guide you. Get in touch today and we’ll help you reach your property goals.
