Policy renewal - are your property sums insured adequate?

When it comes time to renew farm insurance or business property insurance policies, Elders Insurance Launceston agent Grant Dohnt says that he highlights with each client the importance of updating their sums insured.

Mr Dohnt says that movements in the Consumer Price Index (CPI) can have consequences for the cost of rebuilding or repairing structures.

He keeps a close eye on the cost of building materials - this way he can accurately advise his clients how these should be taken into account when updating their policy.

And when it comes to predicting the costs of cleaning up after a loss causing event, it is critical to think of all the possible expenses.

Mr Dohnt says that many buildings can contain asbestos, and this can add significantly to the cost of removing debris.

Master Builders Australia released a warning last month (January 21) about the need to handle asbestos with extreme caution.

"Asbestos is difficult to identify and, once disturbed and airborne, it can pose serious health risks," said Master Builders acting chief executive officer Richard Calver in a statement.

Mr Calver said it is crucial that a licensed professional handles and disposes of any asbestos containing materials, regardless of the quantity. This needs to be factored into sums insured, says Mr Dohnt.

When a catastrophe hits, those who find themselves underinsured will likely have to turn to banks or other lenders to make up the shortfall of the total required to repair or replace structures or equipment.

The Elders Insurance Launceston agent encourages business and farm owners to think about the costs of borrowing from the bank and then consider how much could be saved by simply ensuring that sums insured are adequate in the first place.