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Are you properly covered for extreme weather?

As America braces itself for the most threatening storm the country has ever faced, Australia takes a look at its run-ins with Mother Nature and the impact they are having on our finances.

Head of Geo Risks Research centre at Munich Re Professor Peter Hoppe said financial loss from Australia’s extreme weather has risen four-fold in the last 30 years and with climate change intensifying, it is predicted to only get worse.

”Due to [Australia’s) already high natural climate volatility and extremes – droughts, heatwaves, floods – only small changes in climate may result in high losses,” Professor Hoppe said.

From 1980 to 2011, 820 ‘loss events’ occurred from the weather in Australia. In total, 1100 lives were lost and $US20 billion in insured losses was claimed.

With the severity and frequency of extreme weather increasing, you need to be sure you are properly covered by insurance in case of an emergency.

When Brisbane was inundated by devastating flood waters in 2011 , 58,463 insurance claims were made. 15% of these claims were still open 12 months later, leaving thousands of people out of homes and out of pocket.

If you already have insurance, don’t wait until the disaster strikes to check if you are covered for it. Go through your policy with a fine-toothed comb.

Are you covered?

While most insurance policies generally cover storm damage, the level of cover varies. Some policies may include hail damage while others might only include it at an extra cost. The same goes for floods, bushfires and flash floods. Ask your insurance provider for a definition of each term to ensure you are properly covered.

Do you have what you need?

Australia is an incredible diverse country with several different environments, climates and weather patterns. Some areas might be prone to heavy rains and flash flooding while others are prone to dry spells and bushfires. Check the environmental history in your area and make sure you are covered properly.

Will you have enough?

Losing your home to a natural disaster is devastating. Not only do your lose your home, but all the memories and treasured possessions like photos within it. Insurance can’t help recover the sentiment attached to your home, but it should certainly help replace your home and contents, cover all the labour costs and pay for alternative accommodation while your home is being rebuilt. Make sure you know how much cover you will receive, if it will be enough, and how you pay for this through your policy.

Don’t settle

If you are dealing with a company who won’t cover you for what you need, shop around. You will find a company who will cover you for exactly what you need at a reasonable cost. It’s better to pay for what you need than to pay for less cover and get caught out when you need it most.

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