Have you got it insured correctly? Martin Hawes article here, raises a particually direct point about your house insurance if it is in a family trust.

As Martin outlines in his article, 'underinsurance also ought to be a worry for trustees of family trusts and other trusts.

Trustees are obligated to look after (and properly insure) the assets of a trust, and if they do not, the beneficiaries can demand that trustees make good any losses. This means that if we had simply accepted the default amount from the insurance company ($693,000) and the house burnt down and cost $1.1 million to rebuild, the trustees could be liable for over $400,000. This should have trustees thinking hard.

Insuring big assets needs to be accurate: trustees or not, people should mostly ignore the estimate from insurers and at the least use a couple of the online calculators. If you have any doubt, you will be financially safer and sleep a lot better by taking on that one-off cost of a quantity surveyor to get an accurate figure.'

This ties in with a previous article on this blog referring to recent statistics about the values people are using to insure their homes. A real concern at claim time, as perceived savings are realised as real losses due to under insurance. 

From the March Herald article, New Zealand's biggest insurer revealed that 60 to 75 per cent of its 800,000 homeowner policy holders have not responded to new estimated house values the company sent to them.

IAG New Zealand - which owns NZI, State Insurance and AMI Insurance - said home owners might not realise they could be left with crippling debts if disaster struck and they had not covered the full replacement cost of the house.

AA Insurance, which has more than 300,000 customers, said 75 per cent of its policy-holders had not made any changes to the estimated figure sent to them.

Of those who changed the cover level, almost 90 per cent increased their cover, and early claims suggested these higher valuations were correct.

If you are one of the 75% who just paid the renewal on your home insurance, give us a call and give us the opportuinty to help you through insuring you home correctly so you don't face heart break, debt or financial ruin if you have a total loss.

The information is only intended to be of a general nature and should not be relied upon in any part without obtaining full details of the products and services by contacting Willowgrove Consulting Limited. All product and service details, terms, conditions and other information are subject to change at anytime without notice. Terms, conditions and fees apply to the various products and services and are available on request. A disclosure document will be provided to you on request free of charge.