RACT Insurance has received a number of inquiries from the local community in the wake of the bushfires both locally and on the mainland, which have ranged from how to ensure you have appropriate and adequate levels of insurance, to understanding how non-insurance and underinsurance within our community is managed.
It's impossible not to feel heartbroken for the thousands of Australians who have already lost their homes in the bushfire crisis, with months still to go in the bushfire season. And while nothing will repair the grief of losing your home, we would urge Tasmanians to stop and take the time now, to ensure they have the appropriate level of insurance should the worst happen.
Being complacent with your insurance cover can lead to either not having any insurance or not having adequate cover to allow you to rebuild and get your life back on track should you be affected by a natural disaster or extreme event.
Our experience at RACT Insurance after the Dunalley bushfires was that about 25 per cent of the major property losses we supported our customers with were under insured. And with 1500 homes already lost to the bushfire crisis on the mainland, there are concerns many won't have sufficient insurance to fully recover and rebuild.
After the Dunalley bushfires and more recently the southern floods, we found that having the appropriate amount of insurance, gave people the peace of mind and breathing space to think about their future.
After Dunalley for example, some people knew immediately they wanted to rebuild and move on with their lives.
Our experience at RACT Insurance after the Dunalley bushfires was that about 25 per cent of the major property losses we supported our customers with were under insured.RACT Insurance CEO Trent Sayers
While for others, having insurance gave them the opportunity to sit back and reflect, allowing them to choose to take cash settlements or move in a new direction.
And although we have generous communities and governments that respond to catastrophic events, this doesn't give you the certainty that we know people need post a traumatic event to be confident that they have a way forward to recover, you preferably don't want to be banking on the goodwill of good people should the worst happen to you to rebuild your home or business.
As we have seen, communities rally around to support, and by virtue of individuals having their own insurance and appropriate levels of insurance in place this support and the funds raised can be prioritised towards the rebuilding our communities and community infrastructure. In our experience, some of the biggest factors behind not having enough insurance cover often relate to the surge in demand following major events.
Demand surge can cause higher costs for trade and materials, temporary accommodation and the general cost to rebuild post a major event. On top of these costs is a range of ancillary costs, including planning, engineering and architectural services, as well as the removal of debris.
What people don't normally factor in when calculating how much insurance they require, are the costs of bringing a building up to current building codes and standards.
When looking at your insurance policy you also need to be clear about whether these ancillary costs are part of the sum insured, or in addition to this figure.
My message to all Tasmanians is to take the time now and use the simple resources available to help you calculate the sum you need to insure your home so you can fully recover after a disaster. You can also get your home professionally valued, but in most circumstances, for a standard home, this shouldn't be necessary if you take the time to work through these tools. And I would strongly urge everyone not to be conservative in their estimates of the cost of rebuilding. We have worked with many Tasmanians who have had the worst happen to their biggest asset and it's an incredibly emotional and traumatic time. Ensuring you not only have insurance but also the right amount and type of insurance at least removes one of the biggest worries.
After a catastrophic event, you also have in your insurer's resources supporting you to recover, providing emergency funds, temporary accommodation and generally assist you in your time of need.
Our hearts go out to all the people currently experiencing what we are seeing on the mainland, particularly following our involvement in the many events we have supported Tasmanians recover from.
To help understand and estimate your insurance coverage levels, find the insurance calculators at www.understandinginsurance.com.au
- Trent Sayers is the chief executive of RACT Insurance.