Many people discover too late that their insurance cover isn't enough to rebuild their home and replace their possessions. The bushfires in Canberra a number of  years ago were a prime example. Research of those affected shows that on average, homeowners were underinsured by between 27% - 40%. 

Insurance policies transfer risk from the property owner to the insurance company.

Are you adequately insured !!!

Every policy has exclusions because there are some risks of damage that insurance companies will not insure against, such as landslip or high tides. Some insurance companies will cover a certain event while others don't. Not all insurance policies are the same. The cheapest may be cheap for a reason. A saving of $50 may cost you thousands!

To estimate the value of your home you first need to know the size in square metres. If you haven't a copy of the house plan you need to measure the external boundaries of the dwelling. Multiply the length by the width to give you the floor area in square metres eg: a building 25 metres long and 10 metres wide has an area of 250 square metres. If the house has more than one square level, don't forget to add that as well.

Knowing the overall size of the home will assist to work out how much it would cost to rebuild. Note any outbuildings, pergolas, external blinds, fences, gates, pools or other special features and estimate their replacement value, as these are usually covered by your insurance policy. To find out the cost per square metre you could talk to someone you know in the industry to find out building costs. Insurance companies often provide general building costs. Another option is to look at housing magazines or supplements in newspapers to find out what it is costing to build houses of similar size and design to yours.

The key to insurance is:

Insure your house once you have signed a contract.

Ensure the house is insured for the appropriate amount.

Review your insurance level every year with a view to increasing it as costs to build generally rise each year.