Cover ad­vice

Townsville Bulletin - - Investor -

WAKE-UP CALL: Dar­ren Rob­bins from Her­ron Todd White says ad­e­quate in­surance is es­sen­tial CY­CLONE Yasi should pro­vide a wake-up call for home­own­ers to in­sure their prop­erty to its cur­rent re­place­ment value, ac­cord­ing to in­de­pen­dent prop­erty ad­vis­ers Her­ron Todd White.

The firm’s res­i­den­tial di­rec­tor, Dar­ren Robins, said many home­own­ers would have faced fi­nan­cial disas­ter if Yasi had hit Townsville with its full force, as i t d i d i n Card­well, Tul l y , Mis­sion Beach and In­n­is­fail.

Mr Robins said home­own­ers should check that their in­surance pay­out would cover the true re­place­ment cost of their prop­erty.

‘‘ Weather fore­cast­ers have warned that the cy­clone sea­son may be far from over,’’ Mr Robins said.

‘‘ As we saw with Yasi, cy­clones can flat­ten prop­er­ties and leave an enor­mous clean-up bill. Townsville dodged a bul­let with Cy­clone Yasi and it serves as a re­minder to make sure our prop­er­ties are pro­tected with an up-to-date level of in­surance cover.

‘‘ The price to re­place a home, which in­cludes costs associated with de­mo­li­tion and site clear­ance, has in­creased dra­mat­i­cally over the past decade so even if your in­surance cover was up to date five years ago, the chances are there would be a price short­fall.’’

In­surance providers use in­for­ma­tion from a prac­tice known as a Re­place­ment Cost Es­ti­mate to cal­cu­late the pre­mium for de­fined risks and to set the limit of in­dem­nity on which the in­surance is based.

‘‘ Along with de­ter­min­ing a fig­ure that would al­low you to re­place your cur­rent home in the act of an in­sur­able disas­ter, Re­place­ment Cost Es­ti­mates also al­low for any es­ca­la­tion in cost up to the disas­ter date, which can of­ten be sub­stan­tial,’’ he said.

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