The coronavirus outbreak is having a major effect on our everyday lives, including our finances. If you've been affected, it can be a tough time. You're not alone and home insurance providers are doing their bit to help. Many are offering payment extensions, reduced payments and more.
You might be able to reduce or defer your payments depending on who you are with. Most of the providers offering help are financial institutions who also provide home insurance. Therefore, the financial hardship assistance they provide might not be limited solely to your home insurance. Here's a list of how and where you might find help.
To find out if you can defer or reduce your home insurance payments, you should:
- Contact your insurer. If you're experiencing financial difficulties, possibly as a result of the coronavirus outbreak, and can't pay for your home insurance, contact your insurer. While many do not state that they provide assistance on their website, you might be able to come to some sort of agreement. They might be able to offer you a more affordable policy, or allow you longer to pay.
- Deferring payment. If you are able to defer payment, keep in mind that you will probably have to pay double the amount when your next payment is due. You might be able to pay in fortnightly instalments. Speak to your insurer to see what options are available.
- Pay on time. To ensure you don't go into arrears, make sure you take down the new payment date. If you don't, you risk having your home insurance coverage.
Many home insurance providers are not providing any assistance to those suffering from financial hardship. If you're one of these people, there are few other ways you can keep cash in your wallet.
- Comparing providers. In the current climate, now is a good time to assess your expenses. You might be able to save by switching providers. Use Finder's home insurance page to compare policies side-by-side and see if there's a better deal out there.
- What type of insurance is right for you? There isn't just one type of home insurance. Home and contents insurance covers you for loss or damage to your home, as well as all the contents inside. You can buy both contents insurance and home insurance (referred to as building insurance) as individual policies. If you want to cut back even more, you can also get single item insurance - which covers individual items like your phone and laptop. Keep in mind though that while these policies cost more, they often have high excesses and low benefit limits (the amount they'll reimburse you).
- Cancel your policy. If you can't afford to pay your home insurance, you might need to cancel your policy. It's not ideal, as your home is the most precious asset you own, but it might be necessary. Remember that some policies will have a cancellation fee. However, it's usually only around $30-$40. There might be a different way to cancel your policy depending on how you're paying.
While it will differ from insurer to insurer, you can expect the following to happen in most cases:
- If you don't pay your premium. You'll be sent a reminder from your provider, usually by text or email - often both.
- If your premium payment is overdue by 14 days or more. At this point, they will likely refuse to cover you if you make a claim.
- If your payment is overdue by a month or more. By this time, if you haven't paid, they will probably cancel your policy.
If you go about it this way, you'll probably have a hard time getting an insurance policy in the future. The best way to cancel your policy is to do it in writing. Email and call your insurer letting them know that you would like to cancel. You'll need to have the following information on hand:
- Your name
- Your policy number
- The address of the insured home
- Your contact number
- Your signature
Switching to save some cash?
Are you worried about your finances during this time? Spending time on a little admin can save you from spending more cash than you need to.
Here are some guides on how to save money on your daily expenses. There are loads of little things that you can save money. It all adds up in the end!