Your home is more than just a house, it’s your sanctuary, your place of love, comfort, and connection. It’s where memories are made and life happens. While your home or your investment property is a powerful financial asset, a source of income that helps fund your lifestyle, your goals, and your future. This is why it’s important to have appropriate insurance for your property.
Is one of your most important assets properly insured?
At Safeguard Insurance Brokers, we understand that whether it’s your home or your investment property, it represents security, stability, and serious value. But without the right insurance in place, all of that could be at risk. Underinsurance occurs when your property is not insured for the appropriate amount and can cost you thousands, leaving you exposed when you need support the most.
That’s why we’re committed to helping our clients protect what matters most, with insurance that actually meets your specific needs, not just fills a checkbox.
Are You Getting the Most Out of Your Insurance?
If you’ve ever reviewed your property or home insurance policy, you’ve probably come across the term “sums insured.” It’s one of those phrases that sounds straightforward, but it carries a lot of weight.
Put simply, the “sums insured” is the amount that your policy premium is calculated on.
It is the maximum amount your insurer will pay if your property is damaged or destroyed. It’s the amount you nominate when you take out a policy, and it should reflect the full cost to rebuild your property, not just its market value!
One of the biggest misconceptions is thinking the market value of your home equals the rebuild cost. In reality, these are two very different numbers. Market value includes the land, location, and demand. Rebuild value includes demolition, site clean-up, materials, labour, and compliance costs — all of which can vary significantly depending on your location and build type.
Here’s where it gets a little tricky. Too many people assume the sum insured should match what they paid for the home, or what it might sell for today. However, when disaster strikes (which we hope doesn’t) whether from fire, flood, or other damage, what really matters is the rebuilding cost. This includes materials, labour, demolition, debris removal, and compliance with current building codes.
And those costs? Well, they’ve been rising significantly in recent years, so getting this figure wrong can be a costly
Getting your Sums Insured right matters!
With construction and labour costs surging across Australia, underinsurance is now one of the biggest risks property owners face. According to recent industry reports from the Australian Securities and Investments Commission (ASIC), more than 80% of homes are underinsured, sometimes by hundreds of thousands of dollars. This places property owners at significant financial risk if a major event occurs, such as a natural disaster, or even a fire.
Chubb Insurance is reporting that the average new home cost is now almost 40% higher than it was four years ago. This is mainly due to lack of skilled labour to meet the current and projected demand, in addition to the rising cost of materials.
So what can you do about it?
- Use a reputable building cost calculator to get a current estimate of rebuild costs.
- Factor in site access, architectural features, and heritage considerations, all of which can significantly affect the cost to rebuild.
- Review your sum insured regularly, especially if you renovate, extend, or make improvements.
- Be aware of local building codes and potential compliance upgrades that could increase rebuild costs.
- Seek professional advice from your insurance broker to tailor cover that fits your exact property – that’s where we come in!
And it often comes down to one key factor: getting your sum insured (SI) right.
If your sums insured is too low, your insurer may not cover the full cost of rebuilding or repairing your property — meaning you’ll be left to cover the shortfall yourself. This is what it means to be underinsured, and for many Australians, it can be a devastating and costly surprise.
At Safeguard Insurance Brokers, we’re here to help you avoid the financial risks of underinsurance. We work closely with you to ensure your sum insured is accurate and up to date, because this is not just about ticking boxes, it’s about protecting your future.
We see it all the time, families doing the right thing by insuring their property, only to find out they’re underinsured when it’s too late. That’s why we’re passionate about proactive reviews, clear advice, and a client-first approach, so you can have confidence your property is properly protected when it matters most.
Let Us Help Get You Covered: Try our Calculator
To make things easier for you, you can find a helpful calculator on our website that can estimate the approximate value of your property and the level of coverage you may need. Try it out for yourself here.
Not sure where to start?
Of course our friendly team at Safeguard Insurance Brokers can help walk you through a review of your existing policy and help you determine whether your sum insured still reflects current conditions.
Get in touch today to ensure your home is covered appropriately and with the right insurance policy. Call us on (08) 8371 0566 or email us at info@sib.com.au.