Protect your investment at the right time.
10 March 2020
If you’re in the process of buying a new home (or you’re thinking about doing it), insurance is an important consideration. After all, a new home is likely to be the most significant asset you’ll ever buy, so it makes sense to have insurance in place to protect your investment.
But when should you buy that insurance, what type/s of insurance do you need and how much cover should you have? We’ll answer each of those questions for you in turn.
WHEN TO BUY YOUR NEW HOME INSURANCE
It’s important to start researching and organising your home insurance cover once you’ve signed your contract to purchase your new home. That will usually be a month or more before your settlement date (which is the date when you will formally take ownership of your new home and it will become your full legal and financial responsibility).
The home insurance market is highly competitive. It therefore pays to shop around and do your research to try and find the best home insurance policy for your needs well BEFORE your settlement date.
If you don’t have the time to research the home insurance market yourself, it’s worthwhile to contact an insurance broker for advice instead. They should take the time to understand your individual needs and recommend an appropriate home insurance provider, policy and amount of cover for you.
Insurers are legally required to provide you with a product disclosure statement (PDS) prior to you taking out an insurance policy. This PDS must outline the policy’s features, benefits, costs, terms and conditions. It’s especially important to understand the type of damage or loss that you’re covered for, as well as any policy exclusions that will prevent you from making an insurance claim.
You should take the time to read the PDS to make sure that you fully understand the home insurance coverage that you’re buying. If you don’t fully understand it, ask questions of your insurance broker or the insurance company before you agree to the policy.
TYPE OF COVER
There are two basic types of home insurance that you should get: home insurance and contents insurance.
- Home insurance covers the agreed value of your new home itself (in other words, the actual building). Your lender is likely to insist that you have an appropriate level of home insurance cover.
- Contents insurance on the other hand covers the agreed value of all of your possessions inside your home. For example, your furniture, appliances and any other valuable possessions that you might have like jewellery.
Home and contents insurance cover is usually bundled together in the one policy.
HOW MUCH HOME AND CONTENTS INSURANCE COVER TO GET
It’s important that you’re not under insured with your new home. If you are, your insurance cover won’t be able to cover the cost of repairing or replacing your home and contents if you make a claim. Make sure you take out insurance cover for the market value of your new home and contents, and that you review that coverage amount each year or when your circumstances change significantly.
At TERRACE, we specialise in the design and building of two-storey, three-storey, narrow-lot, and micro-lot homes. We also have ready-built new homes available, as well as a range of two-storey house and land packages.
We have an extensive range of home designs and they all make clever use of space. Why not visit one of our TERRACE display homes in Perth at one of the following locations?
- Cockburn Central
- Banksia Grove
- Bennett Springs
We’d love to see you and we’d be happy to answer any questions that you might have.