What You Need to Know About Home Insurance during a Natural Disaster?

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What You Need to Know About Home Insurance during a Natural Disaster?

Natural disasters like a flood or storm is very devastating. Loss of property and assets may lead to financial hardships which you don’t want to face. This is where insurance cover for your home will be helpful.

Here, we will discuss what you need to know about home insurance in the event of a natural disaster in Australia.

Is your area disaster-prone?

First, you need to assess whether your living area is disaster-prone? Evaluating this will help you take further step in covering your home and assets. Contact the local council, insurer and the state emergency service to check about the risk of a natural disaster to your home like a cyclone, storm, flood or bushfire.

Check What Your Insurance Covers

Once you have established that you live in a disaster-prone area, the next step is to check what your current insurance covers. Go through your insurance policy carefully and comprehensively.

There are certain factors that you must be aware of when assessing home insurance for disaster cover:

  • Check if flood cover is included and if it is, see whether it includes all the property parts or exclude some, like retaining walls, bridges etc.

  • Check for what other disasters you are covered for including cyclones, storms, bushfires and how much cover is provided and other aspects that are excluded from the policy.

Get Complete Insurance Cover

If you think that the policy does not cover you comprehensively then talk to your insurer or find another insurer that is best suited for your property.

There have been instances in the past, where people didn’t have enough insurance cover on their home which they found out after the occurrence of a disaster. Make sure you don’t face the same problem which would be stressful and costly. Increasing your insurance premium to cover for the natural disasters may be expensive but will be of great help to you if you need to make a claim.

What Type of Policies Can You Look Forward to If You Are Underinsured?

If your current home insurance does not provide you with enough cover to rebuild your home or excludes some important parts, then you are underinsured.

It is important to discuss your policy with your insurer:

  • Total Replacement Policy

This policy, as stated by the name, covers the entire repair or rebuild process to be undertaken by the insurer to the same standards as prior to the disaster.

  • Sum-Insured Policy with a Safety-Net

This is like a capped add on as a safety net on top of the insured amount, meaning any extra cost to repair or rebuild the house after the sum-insured amount will be covered by the policy. Please make sure you go through the policy details thoroughly before taking this option.

Steps to Take After a Natural Disaster

In the event of a natural disaster that damages your property, you must follow the below steps:

  • Immediately contact your insurer about how you can make a claim. Check if you’re covered for alternate accommodation (if you require it).

  • Once the disaster has passed and it is now safe to go to your property, make sure to assess each and every damaged item thoroughly. Take photos or videos as they are required while claiming your insurance. Make sure you’re safe and check dangers like unsafe electrical wiring or asbestos. Keep away from faulty and damaged electrical equipment.

  • Do not proceed with unauthorised repairs without first checking with your insurer.

Always ensure that your home is built to the disaster prone standards if you live in such an area and make sure that you have enough insurance cover for complete repairs and rebuild, which will help you avoid financial loss as well as stress.

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