Double insuring

[PPCMan]

Hi all

Just a quick question about double insuring. Is it possible to take out double insurance on a propoerty? That is take out 2 insurance policies on a property, (irrespective of the type of insurance - buildings/landlord) with 2 seperate companies? That way you can claim from 2 insurance companies as opoosed to 1.

So if you have a claim and one insurer does not fully cover a insured loss for whatever reason, one can then claim against the 2nd insurer? I see it as a possible way of hedging ones bets.

What do people think? Is this doable? Is there anything preventing someone doing this?

Thanks
PPCMan

 

[wylie]

I am fairly sure that insurance companies ask the question "is there any other insurance over this property?" or something like that.

 

[steveadl]

So when are you burning it down PPCMan?

 

[Nougati]

you can double-insure, but it will only cost you money, as you will pay two premiums, but will only be able to claim once.

insurance is not designed to make a profit on claim, it clealry states that in the PDS. in fact, if you have two policies, you may even have trouble getting your claim paid as the two insurance companies will thow the claim back and forth between each other, as they will be looking for a way to make the other company pay the claim.

 

[jaycee]

I would try & find the right (1) insurance policy which does cover everything you need - surely that would be more straightforward ?

Unless you have items that need separate insurance ( I don't know, a picasso / monet paintings that you wouldn;t insure under that hnomral home & contents type policy anyway), what would be the benefit ?

 

[Perp]

in fact, if you have two policies, you may even have trouble getting your claim paid as the two insurance companies will thow the claim back and forth between each other, as they will be looking for a way to make the other company pay the claim.

I'm sure you're right about that, nougati!

 

[marg4000]

So long as your insurance is done correctly then there is no possible need for another insurance policy. You are paying for another cover that you won't be able to claim on, and as already said will possibly jeopardise both policies.

The main reason claims aren't paid in full is that most people don't insure for a realistic value. Usually this is not deliberate, values can rise quickly and people usually don't realise the value of their home contents.

Also, if you only insure for a token amount, you will only receive a proportion of each claim. Don't think that if you insure your $50K of contents for $20K on the basis that you will never lose the lot then you can claim up to that amount. The insurance company will quickly work out that you have only covered 40% of the total amount of contents, therefore will only pay 40% of any claim. Unless of course you lose the lot, then they will pay $20K but that is only 40% of the loss which is $50K.

With the building, you have to allow for a total loss. Say the house burns down. You have to build a new one. Simple. But then again, you also need to pay for the removal of the debris, new plans, council approvals, and also rent for the 6-9 months it will take to rebuild. Then you have to allow for the outdoor areas you had, turf, pavings, driveways etc which will probably be destroyed during the rebuild. These "extras" can easily add up to $30K or more over and above the cost of the new house. Your insurance policy WILL cover all of this, but only up to the total amount insured.

Consult an insurance broker if you want independent advice.
marg

 

[dave99]

Most insurance policies have a statement to the effect that any amounts you are entitled to from other sources are deducted from your payout. This means that you can't claim on any second policy without the first payout being reduced.

Cheers - Dave99

 

[steveadl]

From an insurance broker:

No it cant be done. Well it can be but you have to declare to the insurer what your doing and they most likely wont. Then when you do have a claim each insurer will contribute 50% - gets very messy and no real advantage. If one insurer declines the claim, the other will as well. If it's a difference in benefits, just insure with the correct company in the first place. i.e. talk to your broker about what your worried about, then get the best policy for that risk / exposure.

I also believe its illegal to have 2 policies without disclosing it, certainly a fraud indicator. Some companies even panic if you over insure your building with the 1 company..

 

[Monopoly]

Yes it's illegal, but I gotta ask......

WHY WOULD YOU????? pay extra money for virtually no better an outcome, in fact, it could be worse!!!

The argument that if one insurer doesn't cover your claim the other might, is almost as pathetic as a child playing each parent against each other!!!

 

[softmonkey]

The argument that if one insurer doesn't cover your claim the other might, is almost as pathetic as a child playing each parent against each other!!!

hi monopoly take it easy, it was a valid question from PCMan and many of us learnt something

regards

 

[Monopoly]

hi monopoly take it easy, it was a valid question from PCMan and many of us learnt something

regards

Hey SM, I wasn't having a go at PCMan, sorry if it sounded that way. I meant no disrespect to PCMan and was purely commenting on what is (IMO) an unncessary (and costly) game-playing tactic often misconstrued as self protection.

Rest assured, I'm as chilled as you can get these days (too tired to even bother getting heated up)!!

 

[Pushka]

in fact, if you have two policies, you may even have trouble getting your claim paid as the two insurance companies will thow the claim back and forth between each other, as they will be looking for a way to make the other company pay the claim.

Yup, that is exactly what will happen. A few years ago, a water main burst in Adelaide and the rocks and debris, and water totally gutted someone's home. It was declared to be demolished. For the next few years, the owners could do nothing and the house remained, as SA Water's Insurers, and the home owners Insurers battled it out between them as to who should pay the bill.

For what it is worth, I have had excellent service from SGIC (IAG) in the settling of several claims (burglary, fire, loss of property) in the last five years.

 

[BayView]

Rest assured, I'm as chilled as you can get these days (too tired to even bother getting heated up)!!

Is there another emoticon BEYOND the really smiley face?

I wanna go 4 smilies.

I think only being allowed to attach 5 emoticons would be discrimination against being happy.

I'm cr@pping on now.

 

[steveadl]

Yup, that is exactly what will happen. A few years ago, a water main burst in Adelaide and the rocks and debris, and water totally gutted someone's home. It was declared to be demolished. For the next few years, the owners could do nothing and the house remained, as SA Water's Insurers, and the home owners Insurers battled it out between them as to who should pay the bill.

For what it is worth, I have had excellent service from SGIC (IAG) in the settling of several claims (burglary, fire, loss of property) in the last five years.

Gorge Rd right Pushka?

I remember that one. He was waiting for insurance co's and compensation etc. to come through. Story was the house was unfit and had to be demolished, then once it was all settled - low and behold, they moved back in. Turns out it didn't need to be demolished after all!

Not that I don't think he should'nt have been compensated, but still.

 

[Pushka]

Gorge Rd right Pushka?

I remember that one. He was waiting for insurance co's and compensation etc. to come through. Story was the house was unfit and had to be demolished, then once it was all settled - low and behold, they moved back in. Turns out it didn't need to be demolished after all!

Not that I don't think he should'nt have been compensated, but still.

Hey Steve, yep, that's it.

Having dealt with Insurance companies for a bit now, the claim is worked out on whatever is the cheapest to do - there is an equation they use (basically cost of repair versus cost of rebuilding, taking into account the amount that the house is insured for) and that decides what payment they make. If the Insurer says it is a full payout, then the Insurer hands over the $$$, that payment goes to the owner, and unless the house is declared uninhabitable by the Council, the owners can do whatever they like with the money! Including moving back in if they want.