Cost of living seems residents under insuring their properties as household items rise

ABC NEWS (Australia)

Queenslanders are being urged to make sure their insurance cover is enough to help them get back on their feet if disaster strikes. Surveys have revealed the vast majority across the state believe they are under insured.

Transcript

00:00Ashley Timms was on holiday in Fiji when she got the call an electrical fire had ripped

00:08through her Toowoomba unit.

00:09I lost just about everything.

00:12She managed to get a full payout on her contents insurance policy, but it wasn't enough to

00:17cover everything lost in the 2017 fire.

00:20All the little things, all your clothes, all the plates, books, DVDs, things that you don't

00:27actually consider, it all adds up to a lot.

00:31She was underinsured by about $20,000.

00:36When I first got insurance, I wasn't sure how much to get, but there was also the concern

00:43of how much I could afford.

00:45Underinsurance is also an issue for homes and businesses in flood-ravaged North Queensland.

00:50Because of the increase in property builds, the cost to build property, we're seeing that

00:55people are unintentionally becoming underinsured.

00:58We are definitely seeing people, because it's a cost of living crisis, starting to underinsure

01:03or take out no insurance at all, so that is a really, really big problem.

01:08The Insurance Council of Australia has found that 83% of households believe they're underinsured

01:15when it comes to home and contents insurance.

01:18That's if they can even afford it.

01:20It's a risky take, isn't it?

01:21It's a gamble.

01:22It's always a guesstimate.

01:23It just started off at a certain figure and it's just kind of adjusted up over the years.

01:28The Insurance Council is urging homeowners and renters to think about the true cost of

01:33rebuilding.

01:34The main risk over a period of time is that people set and forget their insurance.

01:39They need to take into account that we've been through a period of very high inflation.

01:44With inflation, it pushes up the price of everything, including the cost of rebuilding.

01:48Ashley Tims says while she was underinsured, she's thankful for what she received.

01:53I'm always going to advocate for just get something.

01:57Because even when you're underinsured, it's still some money to rebuild your life.

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