3 insurances you should have if you own property
We know it sounds boring, but insurance is a big deal when buying property. And it’s not just about protecting the bricks, mortar and everything you have inside the house. It’s about protecting your greatest assets - you and your family.
Australia is one of most underinsured countries in the developed world - ranked at number 16 on the global scale to be exact. The general consensus is that should anything happen to our home, income or ability to pay off our mortgage many of us are happy to sell an asset, rely on Centrelink or use our savings.
Just to make sure you have your bases covered, check out our list of the top 3 basic insurances you need to have if you’re a property owner. It’s also important to make sure that you factor these costs in when considering purchasing a property.
#1 basic insurance: Home and contents insurance
Most Australians understand the significance of Home and Contents insurance, and like insuring your car, is the most likely insurance to be purchased out of the three. It protects you financially if your home or the contents of your home are damaged by fire, storm and other natural causes or your property is burgled.
Electronics, musical instruments, jewellry and a range of other items can be covered under home and contents insurance, and can help give you peace of mind that you’re covered should your property be damaged. The last thing you want to be worried after a fire is how you are going to pay to replace everything. While home and contents insurance is relatively low cost and can be purchased easily, make sure that you know exactly what you’re covered for.
#2 basic insurance: Income protection insurance
Many Aussie’s don’t think twice about insuring their home and car, but hesitate when it comes to protecting their ability to earn an income. Most likely your income, and your ability to earn it, is your largest asset and is the most important factor in paying for your lifestyle and your home loan.
Income protection insurance usually pays upto 75% of your income over a short or longer period of time if you are ill or injured and unable to work. Schools fees, mortgage repayments, medical expenses and living costs (like food & petrol) can all be covered while you recover. Even if you are only out of work for a short period, income protection insurance could mean the difference between not having to think about your finances, and having to sell assets to cover your costs.
But there is some good news here. Income protection insurance is tax deductible and can again, be relatively low cost. If the unforeseen happens, such as a cancer diagnosis or even a broken leg, you’ll know you have the funds to get back on your feet again – without putting a major dent in your savings or racking up debt.
#3 basic insurance: Life insurance
Life insurance offers financial protection for your family by providing them with a lump sum if you die or are diagnosed with a terminal illness. This lump sum can help your loved ones keep up with mortgage repayments, or even pay it off completely. This provides financial peace of mind, during a difficult time.
There are many options and extra benefits that can be included when taking out a Life Insurance policy. It is important to get good advice about these as some may be appropriate for you, and some may not be worth the premium. There are also options when it comes to setting up and paying for this cover. Often it can be done through your superannuation, which leaves you more money for everyday living expenses.
Am I covered?
You may want to know for sure if you’re covered, and what insurances might suit you and your life best. It’s important to not only have peace of mind that your bases are covered, but also have insurance that’s right for you. This means that you have insurance that doesn’t fall through when you need it most, and you’re not paying for insurance you don’t need.
The reality of what can happen in life means that when you own a home you need to get all your insurance ‘ducks in a row’. Let us help you make sure that you have all your bases covered when it comes to your mortgage, your income and your family.
We offer a complimentary first appointment
At Live Well Financial planning, we believe that every Australian has the right to good quality, easy-to-understand and transparent financial advice. So we offer a free first appointment with our financial planning team. If you are planning on purchasing a property or currently own a property, Contact Us to book your complimentary financial planning appointment with us.