Beyond Bank Pathways

The ‘must-have’ insurances for financial security

The current uncertain economic climate and recent spate of natural disasters is a reminder for Australians to assess their insurance cover to make sure they have adequate protection.

As your lifestyle changes, it’s important that your insurance cover adapts with it – otherwise you risk being under-insured, which can have devastating financial effects on you and your family.

Here are four types of insurance and why they are ‘must-haves’:

Income Protection – This is the most important type of insurance as it covers you if you’re unable to work due to an illness or accident. While Centrelink benefits may be available, they often are below what you would otherwise earn, and may not be enough to cover mortgage payments and living expenses.

Home Building Insurance – This provides cover for damages to your home building. It’s important to make sure you have sufficient cover for your building at all times and that you remember to update your policy if you make any extensions or modifications to your home. Some policies will also cover the flow-on effects of damage caused to your home. For example, if you were to suffer permanent injuries as a result of damage to your building by an insured event, you may be able to claim back some of the costs of modifying your home to accommodate your needs.

Home Contents Insurance – As well as the ‘big ticket’ items in your home such as furniture and televisions, your home contents also includes all the other bits and pieces you might accumulate over time. Think about your clothing, kitchenware, books, tools and more. Contents insurance can also cover your legal liability for payment of compensation to others where an incident occurs outside the home. For example, if you injured someone while playing golf, you may also be covered for legal costs that may arise as a result of that incident.

Personal Effects Insurance – This is usually an extension of contents insurance and covers personal valuables that are portable, such as bikes, jewellery and phones when you take them away from home. People often underestimate the value of personal effects but these are the items that can be more susceptible to loss, theft or damage when you are out and about.

When you receive your insurance renewal in the mail, take the time to review the level of cover you’ve selected and assess whether your policies need to be updated.

Insurance brokers and financial institutions can provide advice on the different types of insurance and help you understand what’s needed for your individual circumstances.

If you have any questions about insurance feel free to leave a comment below.

^Robert – Chief Executive Officer

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