real estate South Coast Property Specialists (Carlene Franzen) Tips #1087:
Natural Disasters and Home Insurance What a crazy time we have seen on the eastern seaboard over the last few years. Even in our tiny area of the world we have seen major fires, pestilence (covid) and floods. One issue that raises its ugly head every time is that of insurance coverage. Unfortunately, many people are not insured or are underinsured, and disasters like fire or floods can lead to financial ruin and homelessness. And as we have reported recently, the rental market is so tight all around Australia, finding new accommodation is almost impossible.
It has been interesting to hear stories of the insurance fall out after our bush fires at the end of 2019. One report was of a property owner whose home and contents insurance was around $1,500 per year prior to the fires. The following year, the policy stayed roughly the same (presumably a period of grace) BUT then rose to $9,000 the following year. A quick ring around to the other major insurance companies returned quotations in the similar order of magnitude. They were finally able to find another company, who possibly didn’t have the same payouts in our area to the other companies, with a more reasonable quotation of around $2,500.
So, what is going to happen to all these residents up and down the coast who have been impacted by the recent floods? Television interviews of business owners in Lismore have already revealed that very few had full flood coverage as this would have incurred premiums of around $70,000 per year which is probably hardly worth running the business in the first place. And even for those home and business owners that had insurance, are they going to be able to rebuild in the location, what will be the cost of rebuilding to mitigate against future floods and what will their insurance policies cost in a couple of years’ time?
If nothing else, one of the big lessons to be learnt regarding your insurance is to shop around, and then shop around again and again until you have exhausted all your options. Hopefully you will be able to find a policy that suits both your needs and your hip pocket. These natural disasters, or “unprecedented events” as our politicians are coining them seem to be happening far more frequently than we expected and financial ruin or homelessness isn’t something you should be gambling with. beagle weekly : Vol 250 March 11th 2022
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