Life's Better With It Than Without It

Newcastle Herald

Tuesday August 28, 2007

writes Leesha McKenny

THERE'S nothing quite like flood water lapping at your front door or car windscreen to bring home the value of insurance.

That was the reality for many people in the June floods, particularly residents of Maitland like Karen Mandeville.

Evacuated by the State Emergency Services as the floodwaters came closer to her house, Karen was assured that her house would not be as she left it when she returned.

"It was a case of: if it goes under it goes under. I'll deal with it when it happens because I know I'm insured," she said.

"I was listening to the radio for updates and you would hear people who didn't have insurance and I was going: 'How could you not have insurance?"'

But while home owner Karen, 29, has had contents insurance from the moment she left home, and home insurance since she bought her first house, many people simply don't.

Paul Giles from the Insurance Council said the level of non-insurance of home or contents in Australia was of significant concern to the industry.

"Of the 7.7 million households in Australia, it is estimated that 28 per cent are without contents insurance," he said.

"This increases to 74 per cent of young single people who have left home and are either renting or sharing a house, who do not have contents insurance."

Salvation Army financial counsellor Kristen Harnett said that, in many respects, young people more than others could not afford not to insure their property. And this extends to necessities such as the car.

Ms Harnett said they commonly saw people caught out without insurance after a car accident.

"And then they have a loan for $20,000 and then they have to service that with no assets and no means to even get to their job to even be able to pay for that loan," she said.

Even if your car is of little value, third party property insurance can protect you against costs should you back into a Bentley in the Charlestown Square car park.

"And one of the ones that people often forget that they do have is credit insurance," Ms Harnett said.

"You get offered it often when you get your credit card and it means if you become unemployed or disabled, they might pay part of your minimum balance."

It is important to read the fine print before signing up to any policy, and worth checking the details of any policy before you have to.

Ms Harnett said the ASIC website, www.fido.gov.au, was a good place to start for people who wanted to know more before they found themselves caught high and dry.

"That's what insurance is there for those unfortunate events," she said.

Ms Harnett said they commonly saw people caught out without insurance after a car accident.

Getting yourself covered

? Compare apples with apples. Shop around and see what policies are available.

? Know what the policy covers. Read the fine print. In 11 per cent of disputes with insurance companies, the type of loss was not covered by the policy, and in 63 per cent of disputes the insurer refused to pay because of an exception in the policy.

? Make sure you get the appropriate level of cover. Choice magazine reports that up to 80 per cent of homes are underinsured.

? Be straight up. Answer questions of the insurer at all points accurately and truthfully. If you try to fudge something, they can refuse to fork out when you need it.

? Know the terms, such as when your policy will expire. Your insurer should provide you with this information.

? Head to www.fido.gov.au for more information about various types of policies.

Sources: Australian Securities and Investments Commission and Choice magazine.

© 2007 Newcastle Herald

Back to News Index | Back to Home