Tuesday, January 8, 2013

Insurance Contents Conundrum

KS received today the contents insurance renewal for his bohemian retro Cairns Esplanade abode. The renewal proposal from NRMA hiked the premium by a not inconsiderable 157%. KS regards this as somewhat unreasonable given that it also based on a $1,000 excess!

A quick online search of a couple of alternatives of comparable insurance revealed:

NRMA:    $1,047
Suncorp:     $799
RACQ:        $318

Also of interest was that since the insurance was commenced with NRMA now two years ago, the insured amount has been hiked by approximately 10% p.a? Now, the KS abode is furnished in somewhat alternative fashion with the most significant furnishings acquired from the Crackerbox Palace so the contents are not so easily replaced as furnishings from the Harvey Norman selection.

However, I am not aware of any empirical justification for automatic hikes of 10% p.a in contents valuations? Rather if anything I would have thought these had been flat or even declined? Have the NRMA assumed that KS has in the past two years been manically filling his abode with additional flat screen TV's in each room? Obviously they havent checked out the prices at K-Mart lately!

This is also where the vexed issue of strata insurance multiplies complexities! In a strata property carpet is a content while tiles are a fixture covered by the body corporate insurance. I am not aware of anybody who has been able to explain the complexities of strata insurance.

Meanwhile, the experience and quotes indicated here simply provide further evidence of an insurance market which has become dysfunctional?!?

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