Home Insurance Explained: The Meaning of "Excess" and "Sum Insured"

Описание: When you purchase a home insurance policy, it may come with a variety of excess options. This excess is the amount you contribute towards the cost of your claim if you make a claim for an insured event or incident in the future.

Your excess options are dependent on what's offered by the insurer. It’s important to know that the excess you choose affects your premium, which is the amount you pay an insurer for insurance cover. Premiums are usually paid monthly or annually. If you choose a higher basic excess on your policy, you can decrease your premium, and if you choose a lower basic excess, it may increase your premium.

It is worth thinking carefully about the excess you choose when you purchase a home or car insurance policy. While it is cost-effective to pay lower premiums, you need to consider your capacity to pay a higher excess payment in the future if you need to make a claim.

Read more: https://www.racv.com.au/royalauto/pro...

When choosing and buying home insurance, you will come across the term 'sum insured', which is an estimate of how much it would cost to repair or replace your home and/or contents after an insured event.

It's important you have sufficient coverage to protect yourself against financial loss due to unforeseen events, such as fire, theft or storm. Without an adequate sum insured, you might face substantial out-of-pocket expenses in such events.

Read more: https://www.racv.com.au/royalauto/pro...

0:00 – Intro: Home Insurance Terms Explained
0:10 – Common Insurance Mistakes to Avoid
0:31 – What is an Insurance Excess?
0:55 – How Your Excess Affects Your Premium
1:23 – When Does an Excess Apply?
1:34 – Choosing the Right Excess Amount
2:04 – Types of Excess for Home Insurance
2:14 – Understanding Basic Excess Options
2:42 – Accidental Damage Excess and Special Excess
3:04 – How to Change Your Excess
3:46 – What Does Sum Insured Mean?
4:25 – Understanding Your Agreement with the Insurer
4:52 – How Sum Insured is Calculated
5:25 – The Importance of Accurate Estimation
5:32 – The Risks of Underinsurance
6:09 – Common Misconceptions About Sum Insured
6:49 – Determining Your Sum Insured: Factors to Consider
7:52 – When To Review Your Sum Insured
8:22 – How to Adjust Your Sum Insured
8:43 – Impact of Changes on Your Premium
9:07 – Want to Know More?

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The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Products issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.

The RACV Home Buildings and Home Contents Calculators provide an indication of rebuilding or replacement costs only and in no way guarantee the amount RACV Insurance may agree to insure your home or contents for. It is your responsibility to check that this amount is enough to cover the rebuilding costs of your home or replacement costs of your home's contents at today's prices. Before you decide whether to buy or continue to hold RACV Home Insurance, you should calculate the actual replacement value of your home and contents and consider the information in the Product Disclosure Statement.

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