8 – Insurance Deals

Here’s proof that it’s always worth calling your insurance company (or bank, for that matter) for a better deal.

I rang up the company that holds the house and contents policy for our PPOR to increase the sum insured amounts for both (the annual renewal was posted out to me with some increases to both house and contents but I tend to tweak—plus I had a recent valuation for the house to work from which notes an insurance cost).

The attendant confirmed we’d been with this insurer for some time and hey, guess what, I ended up paying $20 less than the renewal price. More importantly, I increased the sum insured amount for the house by $58k and added $20k for contents.

It’s also worth noting here, on the subject of insurance, that having your investment properties insured by the same company will generally entitle you to a multi-policy discount. Whereas conventional wisdom is to not cross-secure your loans by taking out mortgages with the same lender, a similar problem does not exist with insurance. In our case, we’ll be eligible for a 10% discount across all policies with our insurer when we tack on the IP. In other words, save some hassle, save some money, and use the same insurer where it makes sense to do so.

And a final postscript here: all insurance is definitely not the same so I advocate not buying insurance on cost alone. I took the time to read the PDS documents from several insurers last year—RAC, GIO, AMII, parent companies, subsidiaries, etc—and it was surprising what the extra spend will actually get you. The cheaper insurers, like RAC, exclude cover for things that I feel are important. Read the PDS and compare what you’re getting from a more expensive product when your insurance renewal next comes due and call up for a better deal at the very least!

I suppose a disclaimer is also worth posting: I'm just a guy, I'm not an accountant, lawyer, solicitor, tax agent, mortgage broker, banker, financial adviser, insurance agent, land developer, builder, government agent, or anything else so I disclaim your application of anything I write here is to be applied at your own risk. What I write may be incorrect and you are best to seek your own professional advice (tax, legal, financial, and otherwise) before entering into contracts or spending your money. Your situation is unique to you and what I write here reflects my experience only. This content is not professional advice and is not tailored to your situation. I'm learning too and expect to make many, many mistakes along the way.

Enjoy,

Michael