Thread: AAMI House and Contents Insurance

While I have no experience with AAMI, this sort of policy sounds a bit suspect to me. A friend who used to be in the industry explained home insurance to me once, and after that talk, I have always kept my insurance company up to date on the value of my house, i'll try to explain, but I can't remember all the ins and outs. How do they know how much your place is worth - if they just base it on what you tell them, I can see some holes in that.

Lets say (for ease of working out the figures) that your house would cost $400K to rebuild - remember this amount also has to include clearing the block of land of the old house that may have burnt down, etc. The site cleanup costs can exceed $80K in some instances, particullay if there are septic tanks etc - the council and Epa will all get involved in this.

Anyway, say your home insurance was for only $300K, you would be $100K out of pocket, easy to work that out, and it's pretty cut and dried.

Where it gets interesting, is if your house isn't destroyed, just damaged, by fire, flood, etc. Say the damage done was $200k. You would think your insurance (for $300K) would cover it - BUT, this may not be the case. The insurance company can (and do) claim you only have insurance to cover 3/4 of the property ($300K on a $400K property) so only pay 3/4 of the damage - $150K, leaving you out of pocket for the rest.

This happens more than you would think, so every year, I provide my insurer with an up to date value of the property - including site clean up costs, gardens, etc. You will find that figure is about $100K more than the replacement cost of the house. Good insurance companies take these things into account.

Don't trust them as far as you can throw them, read the fine print, and ensure you are really covered for what you think you are...

Cheers - Gav

Thanks for the good points - but AAMI do not base their insurance on a value - the promise is to restore the house to its previous design and standard - irrespective of the cost. If they do and there is no argument then all is good - but then you might not want the same style of house.

I was in the Canberra fires and the experience there was that most homes were under-insured by a big margin but when rebuilt the house was built bigger, better and more modern.

Can you trust the insurance companies to do the right thing or will there be disputes at every turn - eg my house built in the 70s was built from 1850s sandstocks - will it get sandstocks in the new house, all my windows and doors are western red cedar - will I get that or some cheap alternative - however my large balcony has substantial rot and is not safe - will they rebuild it to as new standard.

AAMI just say of course all will be restored but I not sure.

Garry

Yeah, I see what you mean. Not sure what they would do. I still can't work out how they could replace it if they don't have a value, or accurate information on what is already there. Would I trust an insurance company that says they will trust you on your description - absolutely Not...

Amy looks attractive enough but from previous experience with car insurance, I will not go near them again.

Just on the natural disasters thing, most insurance companies actually pay out allot more than they are required to and some go out of their way to pay claims that should by all rights be knocked back.

Originally Posted by roverfan

Just on the natural disasters thing, most insurance companies actually pay out allot more than they are required to and some go out of their way to pay claims that should by all rights be knocked back.

can you give us some names? we got reamed on our business insurance during the floods. had a lot of cover , interuption, equipment breakdown etc but because energex cut power to the cbd "for preservation of life" that voids everything. we just carry the legal requirement now and look after ourselves with the rest. wouldn't trust em as far as I could throw em.

So I take it that no one who has this type of policy and had to claim?

Cheers

Garry

Originally Posted by neil 90

can you give us some names? we got reamed on our business insurance during the floods. had a lot of cover , interuption, equipment breakdown etc but because energex cut power to the cbd "for preservation of life" that voids everything. we just carry the legal requirement now and look after ourselves with the rest. wouldn't trust em as far as I could throw em.

Sorry mate cant help with business, only ever worked with personal products.