“The best defence is a good offence” is an adage you'll more frequently hear listening to Grant Nisbett on replays of the All Blacks.  However, preparation is what creates confidence. If the worst hits, as it has sadly done in the North, what options have you got to ensure your assets are protected and secure beforehand?

Let’s start with the obvious: Insurance.

Insurance is your most basic protection, outsourcing your risk to the insurer, in return for paying into the pool of money each year. But there are tweaks you can make to your bare bones insurance to put yourself slightly further ahead. The most common claims we see in extreme weather events are:

Broken windows

Blown-away sheds

Flood damaged vehicles

The biggest inconvenience of insurance is generally the wait times for assessment and replacement. In a widespread event, you’re still going to face tradies being stretched thin, but streamlining your insurance with a few extensions will cut out the slack and means you can get someone in asap or be looked after in the meantime. Here are some options for extensions.

Excess-Free Glass

Excess free glass on your house won’t speed up your claim, but glass is the most likely thing to break as these events get more frequent. It’s relatively low cost extension, with most insurers charging around $150 a year, but your normal excess would be $400 minimum -  so less than a claim every two years, saves you money. It gives you the opportunity to raise your standard excess, as there aren’t too many claims outside of glass that the higher excess would make uneconomical.

Most water leaks, broken panelling and ruined carpets are pushing the $1000 mark in terms of the full repair bill. So, moving your standard excess from $400 to around $750 will still mean it’s economical to make that claim, but you’ll be saving up to a couple hundred dollars every year you don’t.

Excess free glass on your car works in exactly the same way, but we wouldn’t suggest raising your standard excess at the same time, as a bump in the supermarket carpark is too unlikely to justify having that any higher than the minimum.

Landlord Extension

If you live in your own insured property, then you are covered for alternative accommodation for the time your house is uninhabitable (limits apply). But what if it is a rental property?

The simple question is – in the event your property is uninhabitable, and the tenants must move out, would you be able to cover the mortgage payments yourself?

For most the answer will be no, and that is where a landlord’s extension can be invaluable. Not only does it cover for malicious damage and theft when you do have tenants, but it also covers loss of rent when they can no longer occupy the house. So, while the house is uninhabitable you will be receiving a pay out from the insurer to match that lost income (limits apply). This also applies in situations where the tenant is evicted (with due process) or they simply pick up and leave.

Rental car cover

If your vehicle is undrivable, but still worth fixing, your standard car insurance will cover the cost of the repairs.  What it won’t cover is your rental car hire, while you wait for it to be fixed.

Not only do we have the global shipping and transport network delayed by covid, but factories are still desperately trying to catch up on demand while their warehouses are sparse and they wait for parts to arrive. That delay in the factory getting parts means your mechanic doesn’t get the piece for one or two months after the event, all the while your car sits idle in the workshop.

Adding on a rental car extension to your insurance means your insurer will foot the bill for a rental car while you wait for your car to get repaired. Without a rental cover extension included in your car insurance, you would be footing the bill for this two-month car rental.

Minor inconvenience, or non-negotiable?

With all the scenarios mentioned, it becomes a pros and cons exercise of the costs versus the inconvenience of not having these extensions, while also weighing up the likeliness of a claim.

Using reasonable extensions that manage the current claims climate and constant strain on our wallets is just one tool you can use to give yourself piece of mind when setting things up. Because let’s face it, claims are stressful enough without hoping you could go back in time and tweak your insurance when everything was still ok.

It’s an equation that takes a bit of guess work, knowing your budget and risk tolerance, and one we can help with. Talking through how likely certain things are to happen, while giving you the numbers for what you would stand to save, or pay in a claim situation, is where an insurance adviser on your side is a must-have when it comes to asset protection.

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Ben.

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About Ben:

Hi, I'm Ben, a Broker Support for Caveo, our Fire & General insurance arm at Velocity Financial. My main job is helping Joshua find the best cover for your situation, whether you've got a large portfolio, getting that first home, or bought a car - we will guide you through the process of protecting it, making sure it, and you, are looked after. Whether you work best by reading over things, or talking over coffee, I love taking the time to chat and explain things, so that you can be reassured that you've got the right cover for everything life throws at us. When I'm not working, I'll either be found riding my Kawasaki, out in my kayak, running trails, or packing the car for my next roadie. My friends will say I love talking about these just as much as I like doing them, so I'm always ready for a good walking track recommendation if you've got a stunner.

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‍Disclaimer: Before you make any decisions, discuss your situation with an adviser from Velocity Financial, and seek advice from professionals, such as a lawyer and accountant, to find the best solution for your unique situation.

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