If you have spent your summer holidays making improvements to your home, received valuable Christmas presents or haven’t reviewed your building insurance over the past year, now is the time to make sure your assets are properly protected.

Underinsurance is increasingly common. According to the Insurance Council of Australia more than 80 per cent of households in Australia do not have sufficient cover.

Imagine what it would cost you, at today’s costs, to replace absolutely everything in your home, or to rebuild your home from the ground up.

Underinsurance might not seem like an issue if you only need to replace a stolen television, but it could be a big problem if you need to rebuild your home completely after a disaster like a flood, bushfire or accidental fire. If you are not fully covered, you may end up with a shortfall at a time when you can least afford it.

Homeowners continually underestimate what it would cost to rebuild their home and replace their contents. And renters are just as likely to fall short.

Three quarters (74%) of renters are putting themselves at risk by not insuring their home’s contents.

Checking you have the right level of cover is easy. Use the RAC’s home and contents calculators to help you work out the cost of rebuilding your home and the value of your contents.

We recommend you review your building insurance policy at least once a year to be certain your sum insured will cover the full costs in the event of a major repair or total loss of your home.

Are you at risk of underinsurance?

  • Has it been more than a year since you reviewed your insurance policy or had your cover updated?
  • Have you recently renovated your home or improved the value of it through extensions?
  • Have you made any significant purchases like a pool, shed or patio since your last policy update?
  • Have you purchased additional furniture or valuable contents like a home theatre system or jewellery?
  • Do you live in an area where building costs rise quickly?

If you’ve answered yes to any of these questions, you may be at risk of being underinsured.

For more insurance tips visit the RAC Insurance website.