Learn how to adjust your home insurance coverage and discuss the insured value with your insurance company. Discover why it's essential to ensure your policy reflects the cost of rebuilding, not just the market value.
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“My house has been insured for $500,000 the past 2 years. Just received a renewal email and the insurance company has put the sum now at $567,000. This has increased how much I would be paying every instalment. Can I go back to them and say no I want it at $500k – my house isn’t that flash, $500k would cover more than enough.”
(Original question on Reddit)
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Yes, you can definitely contact your insurance company and discuss the increase in your home’s insured value. It’s important to remember that the insured value of your home is not necessarily its market value, but rather the cost to rebuild it in the event of a disaster.
If you believe that $500,000 is sufficient to cover the cost of rebuilding your home, you can request your insurance company to adjust the insured value accordingly. However, please keep in mind that insurance companies typically adjust the insured value based on factors such as inflation and changes in construction costs.
Before making a decision, it might be beneficial to have a discussion with your insurance agent or a real estate professional to ensure that you have enough coverage. Remember, it’s always better to be safe than sorry when it comes to protecting your home.
Please note that reducing your coverage could lead to you being underinsured, which could result in significant out-of-pocket costs in the event of a claim. It’s always a good idea to review your policy and understand the implications before making any changes.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
