When should you review your insurance?
When we buy house, car and contents cover, it’s really common to never look at them again. However you really should review these as things change.
Below are some things to consider for each of these insurances.
Other than when you move house, people don’t tend to look at this cover, other than to check the price.
However some covers require you to check the sum insured every 3 years and others have their own requirements.
It’s a good idea to review your house sum insured every 2-3 years even if you nothing has changed just to make sure your sum insured is still accurate.
If you have done renovations, that’s a good time as well. And if you have changed the nature of your house, such as renting it out, using AirBNB, spouse moving in etc.
Adding more sum insured is cheap ($10 000 cover is around $1 a month for some insurers), so worth making sure you are insured correctly.
To get an estimate of your sum insured needs you can go to – or get a valuer to do an insurance valuation.
As you buy more stuff, its worth reviewing your covers. January is a good time for this as the household has likely gotten more stuff over Christmas.
If you buy new items, especially anything worth more than $3000 (insurer depending), you should review your cover. If you get rid of a bunch of stuff as well.
If your adult kids move back in, you should increase your cover to cover their stuff, or if they move out. If they go to uni (in the hostels) or boarding school, check your policy to make sure it covers them.
If you move in with your kids, you need to get added to their policy as most insurers automatically cover your kids, but not your parents.
If you have not reviewed your cover in a while, it may be worth starting from scratch and doing a full inventory.
Cars reduce in value, and unless your insurer automatically reduces your cover each year (and even if they do), you should double check your cover levels to make sure you are not overinsured.
Some cars don’t drop value quickly but some do, so how often depends on the car.
Its hard to know how to value the car. Some suggest you check trademe listings, but that only tells you what people are hoping to get, not what its worth. You can search expired listings on trademe, but it may not be a big enough sample size.
What I do, is every couple of years, I go to www.redbook.co.nz and buy a report for my car. It does not cost much, you can choose the quality level of your car, and it will tell you the estimated value.
I tend to insure for $1000 more than the car is worth (while the car is valued between 10 and 20K) just to allow for variation and the accessories, but that’s up to you.
General insurances are really important to make sure that your assets are protected, but they only help if you make sure they stay current.