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How useful is a home insurance calculator?

A home insurance calculator can help you figure out the right level of cover, but flaws could leave you over-exposed or out of pocket.

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Underinsurance is a big problem in Australia and millions of households are at risk of being left out of pocket or unable to rebuild if they ever lost their home.

In fact, an Insurance Council of Australia study found that 83% of households believe they may not have adequate home or contents insurance. Another survey by MCG Quantity Surveyors found large numbers of Aussie homes could be underinsured by up to 66%.

Of course, there are ways to reduce the risk of underinsurance, such as home insurance calculators. They're one of the first steps taken when securing home insurance, and they give us a clearer picture about what full-rebuild costs might actually be.

However, home insurance calculators aren't perfect. Finder entered the details of a three-bedroom house in Sydney into eight different home insurance calculators to find out what it would cost for a complete rebuild. There was a difference of $63,036 between the highest and lowest rebuild quotes.

Check out some home-rebuild quotes from different home insurance calculators

CalculatorHome-rebuild quoteCost breakdown
Budget direct home insurance$298,157Rebuild cost - $224,372
Professional fees - $9,145
Demolition - $37,534
GST - $27,106
Westpac home insurance$256,869Rebuild cost - $224,372
Professional fees - $9,145
GST $23,352
QBE home insurance$283,331Rebuild cost - $210,896
Professional fees - $9,144
Demolition - $37,534
GST $25,757
Allianz home insurance$283,057Rebuild Cost $257,324
GST $25,733
Picture not describedCGU Insurance$235,121Building Cost $213,746
GST $21,375
NRMA_Logo$285,547Building cost - $212,911
Professional fees - $9,144
Demolition - $37,533
GST $25,959
Understand Insurance$298,157Rebuild cost - $224,372
Professional fees - $9,145
Demolition - $37,534
GST $27,106
Suncorp home insurance$238,701Building cost - $217,001
GST $21,700

There were also discrepancies with contents calculators. We entered the same information into 9 different calculators and found a difference of $8,174 between the highest and lowest quote.

While it's less severe than the rebuild discrepancies, it's still a large chunk of money and could leave you seriously out of pocket if you had to replace all of your belongings.

Check out some contents quotes from different home insurance calculators

CalculatorQuote
Budget direct home insurance$59,666
Westpac home insurance$65,585
Sum Insured$60,669
QBE home insurance$64,136
Allianz home insurance$59,666
Picture not describedCGU Insurance$57,411
NRMA_Logo$58,800
Understand Insurance$59,666
Suncorp home insurance$64,136

Nobody wants to lodge a claim only to find out they don't have enough insurance to cover their costs, especially if they come up short by tens of thousands of dollars. On the other hand, nobody wants to be paying too much for their home insurance. So what's the solution?

Making the most out of home insurance calculators

While home insurance calculators are problematic, there are ways to make sure you're getting the most value out of a home insurance calculator.

Know the details of your home
You'll be asked heaps of questions when filling in a home insurance calculator. Is your home built on a slope? Are building materials scarce in your local area? What materials are used in the construction of your home?
Don't guess. If you're not 100% sure about the answers, type your address into Google to find a property report. If there is still information missing, check public records. One wrong guess could skew the quote by tens of thousands of dollars.

Use a thorough calculator
Some calculators won't ask how close you are to bushland, how many stories your home is, or even what the specific address is. It's worth trying a few calculators but pay particular attention to the ones that are thorough in their questionnaire.

Check the breakdown costs
Check whether professional fees and demolition costs are included in the quote. These can add tens of thousands of dollars on top of the initial estimation if they're not already included.

Other tools against underinsurance

Home insurance calculators are an important tool in preventing underinsurance, but they're not the only one in the box.

Sum insured safeguard

Lots of insurers offer a sum insured safeguard, which promises to increase your sum insured amount if it turns out the initial valuation was incorrect. Usually, they'll increase your sum insured by a certain percentage, such as 25%. A sum insured safeguard may come as standard, may cost a little more or it may not be offered at all – it all depends on the insurer.

Full-building replacement

Full-building replacement is a less common but more comprehensive version of sum insured safeguard. It promises to pay the full cost of replacing your home if it's a total loss, even if it is significantly more than the home was initially insured for.

Professional valuation

Having your home professionally valued on a regular basis is an effective way to minimise your risk of underinsurance. Getting a builder or quantity surveyor to give you a quote for the potential full-replacement cost will give you extra peace of mind that you're adequately covered.

Which insurers offer underinsurance protection?

Check the table below to see which insurers on our panel offer a sum insured safeguard or full-building replacement, so you know you have some protection against under insurance.

BrandBenefitPotential sum insured increasePolicy wordingApply
Picture not describedSum Insured SafeguardUp to 25%The Sum Insured Safeguard cover means we will increase your sum insured that is stated on your Insurance Certificate by up to an additional 25%Get quote
Picture not describedSum Insured SafeguardUp to 25%The Sum Insured Safeguard cover means we will increase your sum insured that is stated on your Insurance Certificate by up to an additional 25%Get quote
St. George logoSum insured safety netUp to 30%If the cost to repair or replace your building is more than your sum insured, we will pay the extra cost to:
• repair the damage, or
• replace your building. The sum insured safety net does not increase your sum insured or any other additional benefit
Get quote
Westpac logoSum insured safety netUp to 30%If the cost to repair or replace your building is more than your sum insured, we will pay the extra cost to:
• repair the damage, or
• replace your building. The sum insured safety net does not increase your sum insured or any other additional benefit
Get quote
Anz home insuranceFull building replacementTotal valueThis is the total amount payable to rebuild your buildings at the insured site to the same size and standard as you current buildings in the event that a total loss occurs as a result of an insured eventGet quote

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