Property owners have been urged to ensure they have adequate property insurance with the start of the hot summer months and unseasonable weather patterns
The huge destruction caused by bush fires by fires in Esperance in 2015 and Yarloop in 2016 highlight the need for property owners in Western Australia to properly insure their properties according to Shane Kempton, Chief Operations Office for Professionals Real Estate Group in Western Australia and the Northern Terriority.
“For most people, their residential home was their biggest financial asset and insurance is critical especially for people who may own several properties such as investors.
‘”Property owners in Perth itself face the real danger of bush fires as evidenced by the major destruction of homes recently caused in the Hills area of the City over recent years by summer bush fires. As recently, as January 2014, some 57 homes were completely destroyed by bush fires in the Stoneville, Parkerville and Mt Helena suburbs of the Hills area.
“The widespread destruction of properties caused by fires covering such a large geographic area shows that no-one is immune from having their home destroyed.
“The bush fire season in WA has now arrived and it is time for all property owners to re-assess their cover.
“Whether it is the threat of bush fires, storm damage or accidental fires in the home, property owners should check that they have adequate insurance cover.
“Victoria is about to face what has been quoted as a once in 100 year storm.
“Queensland and NSW have both experienced the destruction of flooding.
“Many people underestimate the cost of repairing or rebuilding their homes because construction costs have risen very sharply over the last decade.
“The danger of under insurance has been highlighted by the Australian Securities & Investments Commission (ASIC) in its report, “Getting home insurance- A report into under insurance”. ASIC notes surveys which have found that between 27% and 81% of home owners were under insured by 10% or more.
“ASIC also highlighted research which found that 24 per cent of consumers did not increase their insurance following renovations costing between $20,000 and $60,000.
“The danger of under insurance is particularly high for first home buyers who have little equity in their homes and may try to save funds by limiting their level of insurance.
“It is a traumatic enough experience to have your home destroyed by a fire, flood or storm. However, it is even more traumatic if you don’t have the necessary funds to rebuild the property due to lack of cover.
“In addition, it is believed that only a very small proportion of investment properties have some form of rental insurance product.
‘”These products provide the investor with protection against malicious damage to the property as well as loss of rent.
“A bad tenant can cause thousands of dollars damage to a property and may owe several thousand dollars in rent before they are finally evicted by the courts.
“Many property owners view insurance as an unnecessary expense and they under insure their property or do not have any home insurance.
“By trying to save a few hundred dollars each year in insurance, these property owners are putting their financial future at risk,” he said.