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The insured value of many properties is well below their current replacement costs. Many homeowners have renovated or extended their properties without increasing the sum insured, and construction costs have escalated.

For insurance purposes, it is suggested that homeowners at least apply a rule of thumb of between $1000 to $1100 per square metre for single storey, brick and tile dwellings in the Perth metropolitan area. For double-storey homes, a figure of around $2000 per square metre is suggested. In the rural areas a premium should be added.

Don’t forget to check your contents insurance carefully too, as the replacement costs for many of your possessions such as whitegoods, clothes and furniture have escalated over time.

On other related insurance matters, if you are renovating your existing home you should check with your insurer that your policy is still current during the renovation period. Some policies are not valid while renovation work is being carried out.

Finally if you are building a new home, insurance cover should be in place from the date of practical completion. From that date the builder’s insurance policy expires and you will need to arrange your own house and contents insurance.

Contact MBA Insurance Services on 08 9476 9890 or for a quote.

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