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The average value of an Australian household’s contents was over $60,000 in 20101. But the value of your personal possessions may (and probably will) differ from this. As mentioned earlier, it’s important to calculate the value of your household goods carefully to ensure you’re properly covered in the case of damage or loss.
Here are some useful tips2 on calculating the value of your household contents:
Going from room to room will help you see what you actually have, and will allow you to write it all down systematically.
Also, by ticking off rooms, you can gradually make your way through the house at your own leisure, without worrying that you’ll miss something.
You may think that some of your possessions aren’t valuable enough to include on your list, but if the unthinkable happens and you lose everything, these things will still need to be replaced.
Inexpensive items, like clothes, can add up and leave you underinsured if you don’t factor them into your calculations.
It’s easy to make a list of home contents, insure these items for a particular amount under your policy, and then forget to recalculate when you buy something new.
For example, you may purchase a new computer, TV, or artwork. In which case you need to make sure to check whether the insured value of your contents should be increased.
Receipts can help you create a more accurate list by reminding you of exactly how much something cost. It may also help to provide receipts during a claim to speed up the process.
Photos can help you make an accurate list, and can also be helpful in the case of a claim.
Australian insurers offer a wide variety of home and contents policies. They usually have unique inclusions, exclusion, caps, limits and conditions, some of which may be determined by you.
For example, if you’re in an area that is prone to a particular event, like flood or fire, you would normally choose a policy that includes cover for those specific events.
These choices may increase your premium if the insurer determines that they increase your risk for submitting a claim.
As with other insurances, you usually select an excess that you’ll need to pay if you put in a claim. If you choose a higher excess, your insurer may lower your premium because, almost in exchange, they will likely need to pay out less in the event of a claim.
If you’ve previously submitted a claim, your insurer may see you as more of a risk for future claims3. This means that you may have to pay a higher premium.
If you live in an area with a higher risk of an event that may cause severe damage or total loss, like a cyclone, your premium may be higher, as your insurer may have to pay out a higher sum in the case of a claim3. The level of risk for particular events may be determined by the history of claims in the area.