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Tuesday, September 1, 2009

Safe As Houses - Under-Insurance Reduction Australia

Realise That Everything Is Not Always As Secure As It Looks!

Safe As Houses

Understanding 'Under-Insurance' Is The First Step In Protecting Your Biggest Asset.

"Consider this .... If you went out to dinner and returned home to find your house had burned down, would your insurance cover the cost of replacing it? Or have you carried out renovations recently but failed to increase your cover?

Now, with a free guide to protecting your greatest asset, you can check if you're fully covered.

Many victims of the Victorian bushfires, already traumatized by the magnitude of the disaster, now face the bleak prospect of not being able to replace their home and belongings because they weren't adequately insured.

Your level of cover should be based on the cost of replacing your home and belongings, not the market value or purchase price. But we understand assessing building costs and the replacement value of every single item in the home, can be daunting."

The above is an exert from an article by 'MyState Financial', who in conjunction with Australia's largest insurer CGU, are noted as making 'it easy' to estimate building & contents cover, with a step by step guide. The exert of the article was taken from 'MyState Financial's July 2009 Magazine', sent out to policy holders.

Now whilst we think all methods of removing under-insurance from policies are a great idea. It is obvious that some methods, no matter how many times being re-badged, relaunched, rewritten, etc. are just not working! And how do we come to that conclusion? Well, after a major Disaster, we hear time and time again about Under-Insured Homes! If the solutions which have been around for the last five years are working, then surely there would be little under-insurance!

As we see it, areas that could be improved offering better help and creating action, in the battle with Under-Insurance are:

  • Increasing the questions to the householder, confirming that the removal of debris, demolition costs and rebuilding fees have been taken into account when estimating the value of the home. We contacted a few Australian Insurance Suppliers, and were never asked such questions on a new policy.
  • Not writing a policy until the values submitted are known by as many means as possible to be accurate & true! At present Insurance policies are churned out on the premise, that the householder has taken the above factors into account.
  • Questions regarding renovations, decoration, new purchases, etc. could be asked at renewal time! We have never been asked such questions!
  • One big problem, is householders think the Insurer has everything under control! Householders especially in the 40+ age range. From our experience, it is like a belief that there is a large 'Crystal Ball' in the Insurers office. This mindset may be from when years ago, Insurers would make out that everything was 100% under control! There was no need to worry! Of course nowadays that kind of mindset has changed, or has it not?

When we question households about under-insurance, at first we are told it not present. After a few more questions and scenarios, the householder is too often aware, they could be under-insured and may have been for a long time! Up to now, they just assumed everything would be fine! All under control by the large Insurance Company. It is only with luck, they have not as yet made a claim!

The next step of taking inventory in cases such as this, usually results in Under-Insurance!

The householder is not a trained Insurance valuer! Better guidance and questions from the Insurance Company is needed at policy creation and policy renewal! If the same attention to detail was supplied at policy creation, as when the loss adjuster knocks on the door, policies would be a lot more accurate. Unfortunately where a system that has built in errors, at the expense of the policy holders, you would question the 'good faith' that is being offered by the large Insurance Companies.

YES, the present Insurance system can be improved! Inventories of property and contents before loss, make commonsense. A record of property can be easily forwarded after theft or during claim time. If kept up to date, an inventory of property makes the recovery after loss, a lot easier. And there is less work for all concerned parties, which would reduce workloads, costs and hopefully reduce the cost of policies. As we all know inaccurate policies create more work and thus will only raise the cost of insurance.

Surely if an Insurance Company wanting to make sure it's policy holders have 100% accurate policies, it is not too hard to make sure they 'take inventory'. Offer discounts, inform them of services that will take inventory for them. Do not write a policy until the inventory is supplied!

YES Insurance Guides are a good idea, but what % of your clients use them? If an Insurer is caring for it's policy holders like they say they are, they should go 100% in making sure all accounts are accurate. Remember the present system is not eliminating under-insurance! The system needs to change!

Articles such as the above, have been released after Disaster's too many times already! The above article simply shows again that what is being offered, has failed before! Confirmed by the present number of under-insured homes in Australia. It is not always the householder who should be blaimed for under-insurance, but maybe the Insurer for issuing policy's that are open to inaccuracies, due to basic questions / records / documentation not being asked for and produced, before the policy is written.

Our advice to you the householder is, Record & Document! Compute the value of what you now see listed in the inventory. We will be suprised, if you are not under-insured. Most of our clients are time and time again. There are no Crystal Balls - The only person who knows 100%, what your assets are worth is you the householder. Every other system involves guesswork that will cost you $$$ at the time of making a claim. Under-insurance only shows at claim time, unless you go looking for it! It is the termite of the Insurance World!

Realising you MAY BE Under-Insured and MAKING SURE YOU ARE NOT, is your first step in protecting your biggest asset!

We often say "Until you prove you are not under-insured, we will assume you are! - How does that make you feel? What would you choose to do without, when it is not replaced by your Insurance Claim!"

Sunday, July 5, 2009

Know Your Home Insurance - Homeowners Quiz

Do You Know Your Home Insurance
Know Your Home Insurance - Homeowners Quiz.

The topic of Homeowners Insurance is often in the media. On discovering this video, it's a nice change to see a video with a difference.

The video takes a light hearted view at responses to Home Insurance questions, from people interviewed on the street. Not outright hilarious, but well worth watching.

And how did they get the feedback, well they offered everyone a free coffee!

Create Your Inventory Using The Home Inventory Software We Use

Saturday, July 4, 2009

Insurance Australia Personal Financial Disasters

Aussie Waiting For Change

The Question - Do We Ever Learn & If So How Long Does It Take To See Change? - Do We Not Deserve A Better Service?

The following article is sourced from Money Magazine's August 2007 issue. It reads as if it were relating to the storms of this year!

Big Gaps In Insurance Cover!

"Extensive storm damage in NSW and Victoria recently caused more financial harm than necessary to quite a few people, because while home owners had insurance, their cover was not adequate. They won't be able to claim for the damage and will have to find money for the repairs themselves.

While insurers generally cover storm damage, the level of cover varies from insurer to insurer, says the Australian Securities & Investments Commission (ASIC). For example, it might depend on how the water got into your home. Some insurers will pay only if the water enters through an opening in the wall or roof caused by the storm, not if it seeps or percolates through the walls or ceilings, as might happen in an intense storm.

Others might be a little broader and will only not pay a claim if the water entered through an opening in the wall or roof made in the course of renovations by you or through a door or window you left open.

Flood damage is a bigger problem, as it is often an exclusion in home and contents policies. "As flood cover is not offered in most house and contents insurance policies, people may find out too late that they are not covered for the losses caused by a flood," says ASIC. "Floods occur when rivers, creeks, lakes, dams, reservoirs and other natural water courses (even if modified by humans) burst their banks or overflow. Floods may be also be caused by storms and heavy rain."

The key is to find out about any exclusions to your policy before it's too late. If you're in a vulnerable area, find out if you are covered for storms, floods and flash floods and check how much you're covered for. Some policies limit the amount for damage from flash floods.

If you live in a flood-prone area, it's vital to have adequate cover for flood damage because the repair bills can be huge.

Your local council can be a good place to check whether your area is flood prone. If it is and your existing insurer can't help you, shop around for an insurer that can. And ASIC has some words of advice: "Insist on getting the policy in writing before you buy, because you need time to understand and compare the wording of different policies to make sure you get the right protection."

Read the policy thoroughly, as is the case with any insurance. "Never buy flood insurance over the phone without reading the policy first," says ASIC.

For the complete story see Money Magazine's August 2007 issue.

Thursday, July 2, 2009

Disaster Inventory - Insurance Bad Faith

Disaster Inventory - Reducing The Risks Of Insurance Bad Faith

Disaster Inventory - The Recording & Documentation Of Property, After A Disaster Event.

Why Would You Need A Disaster Inventory?

The prime reason for a Disaster Inventory is to record the damage at the time of, or soon after an event. If the Disaster Event is community wide, it may be weeks before you are even paid a visit by an Insurance Representative. Having to rely on local Emergency Services for repairs, may be your only choice!

Issues may arise where repairs are only allowed by the Insurance Companies approved contractors, who may be addressing a large Disaster Area. During this time, damage may be increasing to the home. Therefore a record of the damage at the time of the event, easily shows and proves the differences between, the event time and when the contractor arrives.

The Disaster Inventory can also record such unwanted damage as:

  • Water flowing down the inner walls of the home!
  • Mould / damp growing in the internal parts of the home!
  • Damage to floor coverings.
  • Bad repairs.
  • Structural damage.

It all sounds to horrendous! No-one wants it happens to their home! The reality is, it can happen!

We would like to point out that the idea of a Disaster Inventory, was primarily born after looking at various cases of damage to homes, after a Natural Disaster Event. Where homes were left open to the weather for weeks, even for months, whilst the Insurance Company, 'got around' to taking action on the repairs. In fact what starts off as a small damage bill, can easily be escalated into the $10000's, due to a lack of action. It is at times like this, where you would have to ask whether there is any Good Faith, left in the Insurance Agreement!

We would all like to think, that reputable Insurance Companies, would be taking care of our homes, our investments asap after a Disaster. Especially when we may have been a client with them for years.


You may conclude that there is a question, as to whether an Insurance Supplier has the client's best interests at heart, when the home is further damaged! Normally one would have thought the Insurance Agreement would offer service and protection. This is not necessarily the case! The reality is in countries such as the US, there is a large arsenal of lawyers and attorneys, fighting against the large Insurance Companies on behalf of the client, focussing on what they call:


So What Is This Bad Faith Insurance?

  • According to Wikipedia - Insurance Bad Faith is a legal term of art, that describes a tort claim that an insured person may have against an Insurance Company for its Bad Acts. Under the law of most jurisdictions in the United States, Insurance Companies owe a duty of Good Faith & Fair Dealing to the persons they insure. This duty is often referred to as the "implied covenant of good faith and fair dealing" which automatically exists by operation of law in every insurance contract.
  • If an Insurance Company violates that covenant, the insured person (or "policyholder") may sue the company on a tort claim in addition to a standard breach of contract claim. The contract-tort distinction is significant because as a matter of public policy, punitive or exemplary damages are unavailable for contract claims, but are available for tort claims. The end result is that a plaintiff in an Insurance Bad Faith case, may be able to recover an amount larger than the original face value of the policy, if the insurance company's conduct was particularly egregious.

Whilst cases in court, are more prominent in the US, there are still many cases of 'Insurance Bad Faith' here in Australia. Cases may not end up in court, due to the current state of the law. The home owner is being placed in a situation that should not be happening! Legal agreements are being intentionally broken and in some cases it would appear being supported by Legal Protection Services that are there to protect the client.

Let us take a look at a case which has full documentation, supporting the case online. The case in question revolves around an Insurance Company not taking care of adequate repairs after a Disaster. The end result being the home owner and family not living in the home 18 months later! In fact the only option for the home, could be to demolish it and start again.

This is the story of Reny Dener V NRMA. Documentation is supplied by Reny Dener which appears to prove his case. You make up you own mind on who is to blame for the current situation.

It has always been the case that records and documentation of property, help with Disaster Recovery, Proving Ownership and Theft recovery. After all is that why the Police & Insurance Companies recommend it?

Quite ironic that the Home Inventory now has another good use for the householder. To prove the state of damage shortly after the Disaster event and from thereon. In cases such as that of Reny Dener, where the documentation he provides, clearly shows damage being caused to his home, due to slow, poor repairs. Surley this is a case of a large Insurance Company showing NO GOOD FAITH - IRONIC YES! - Show your support for Reny Deren visit his site mynrma.info.

Reny Deren V NRMA is posted on our new blog focusing on Insurance Claim Bad Faith.

If you have a story of Insurance Bad Faith we would love to hear about it. With your permission we will add it to our blog, or link to your information.

Create Your Inventory Using The Home Inventory Software We Use

Tuesday, June 23, 2009

7 Articles To Read Before Taking Inventory

Global Inventory Information Network 7 Articles To Read Before Creating Your Home Inventory Information Designed For Helping Families & Homes - To Prepare For Loss Through Disaster, Emergency & Theft! Aussie Home Inventories

Saturday, April 11, 2009

Home Inventory Video - Inventories Make Common Sense

Victorian Bushfire Australia February 2009

You Would Have Ask Yourself, With The Increase In Natural Disasters Why Is It, That Most Homes Still Don't Have An Inventory Of Their Property & Contents?

Why Do People Think Loss Will Never Happen? Do We Not Insure Our Homes For Loss, For An Event?

So why do so many homes never bother to take inventory of their hard earned possessions, their sentimental items? The bottom line is, you will have a hell of a job ahead, if you aim to create your inventory from memory!

How do you think the owners of the home pictured above went, when attempting to provide thier Insurance Company with the required list of destroyed contents. Taking inventory is plain common sense and a lot easier when your property is in front of you.

The following video by Money Talks [America] with Stacey Johnson, simply states the obvious solution, as being a Home Inventory, when it comes to being prepared for loss.

Rich Connette a Property Loss Consultant states" “I’ve yet to meet a person in 17 years, that knew exactly everything that they owned. The insurance company wants you to write down everything… down to the sock. If you don’t remember it, the insurance companies like that because that’s just less money that they have to pay out.”

So are you one of the homeowners Rich is talking about, "Virtually zero homeowners are prepared to make their insurance company pay."

By Paying Your Home Insurance Premium What Do You Expect For The Service?

If you doubt at all, you will NOT RECEIVE the service you are paying for, then you know what to do!
  1. Record Your Property.
  2. Correct Your Cover, As Your Most Likely Under-Insured.
  3. Keep Your Inventory In A Safe Place ie The Bank.
A Home Inventory is not just something you know the Insurance Company is going to ask for, its common sense. Make your insurance worth the premium. Complete the system today.

Your fooling yourself by putting it off any longer.

Aussie Home Inventories suggests these articles for further reading:

Create Your Inventory Using The Home Inventory Software We Use

Wednesday, March 18, 2009

Property Loss Plus Memory Loss : Reduces Insurance Claims

A Home Inventory Is A Major Part Of Disaster Preparation

If The Only Way To Make An Accurate Claim On Property Losses, Was To Rely On Your Memory How Would You Go?

It Is Sad To Realise That This Is The Only Choice Some People Are Left With, When Trying To Substantiate A Loss!

This tragic scenario can happen! In fact it has, and is happening to many of our fellow Australian's. Unfortunate enough to not have a Home Inventory, or for it to have been destroyed during the disaster. The only tool left to them, for proving their recent losses, is their memory!

When we are asked to imagine a loss, we often imagine walking around the home, looking at damaged parts of the home or missing items of property. What we never imagine, is the fact the event we insured our property for, knocked on the door! Leaving us with an empty space, where once our cherished items and hard earned possessions stood!

Sometimes You May Have No Other Option Than To Rely On Memory!

When a disaster so great, affects our property in such a way, it is obviously going to be effecting all those involved, in a much greater variable magnitude. Too great a magnitude to describe here!

The simple crux of the matter though, is how would anyone be expected to try and remember the smallest of details! After a scenario like this, the memory may hide aspects of the disaster to protect the 'self'. Inside these inaccessible memories, are details of your property. So hard as you may try to remember, you cannot!

As is the case where there is no property left, there is nothing to relate to and 'jog the memory'. After time, chances are greatly reduced of ever recapping those memories. By then people have moved forward. There are so many reasons, it may be difficult to remember.

Homes may often not suffer a total loss, but the property or surrounding area, may be in such a condition that it is unsafe to enter. Such as happens, when homes are involved in earthquakes or major landslides. The local authorities may deem the area too unsafe to access!

Whatever the reasons for losses of such a magnitude, it shows that a full record of property is needed before the disaster, and secondly it needs to be stored away from the home.

One thing is for sure, that any Home Inventory found to be intact after the recent Victorian fires, would be one of the greatest assets to the owner at this time. For those people unfortunate to be looking at a vacant plot, how much would they value a Home Inventory?

A Home Inventory Is Priceless After A Disaster!

If only we had Property Inventories of all the lost homes and businesses. We wish we did! We would be helping those homes and families at their time of need.

With the increase in frequency and severity of natural disasters, it is even more important to be prepared for loss. This means being aware of the type of loss that could occur, and how to maximise the protection of family and home. All homes need to be better prepared for loss, from disaster preparation, to evacuation and survival equipment, awareness and planning.

Should that event occur, that we knowingly insure our homes for every year, we will be prepared as well as possible. Get started today on your loss preparation!

Aussie Home Inventories suggests these articles for further reading:

Create Your Inventory Using The Home Inventory Software We Use

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