The Insurance & Savings Ombudsman Karen Stevens is reminding homeowners that the onus is on them to check their house insurance policies carefully. “We want homeowners to check that the amount they are insuring their house for is enough to rebuild it in the event of a disaster,” says Karen.
“We’ve received a number of comments and phone calls after sending out information on sum insured yesterday. Despite the fact that insurance companies have been working hard to provide sufficient information to their customers, there’s clearly a lack of public knowledge about sum insured. We are trying to make sure that it doesn’t end in tears,” says Karen. “Our role is not only to resolve complaints, but to prevent complaints from arising.”
The ISO Scheme has received a number of enquiries and complaints over a period of time from people who don’t understand what sum insured means. It is the maximum amount an insurer will pay if a house needs to be rebuilt. “For example, in a recent complaint out of Christchurch, a homeowner was underinsured by about $900,000. The homeowner had not understood that the sum insured would only cover him in the event of a total loss up to the maximum amount set out on the policy schedule.
“Now is the time for homeowners to check that the amount of money on the schedule is correct; the exterior square meterage of their home is correct; and additional features of their home have been identified. A good place to start is the calculators on insurers’ websites, followed-up with expert advice from a builder or quantity surveyor if required.”
See the ISO Scheme Sum Insured info sheet.