Instead of taking on that unacceptable out-of-pocket risk, I set about making similar savings with lower risk.
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Ever wondered what you pay for which component of your cover? Well, here it comes … because I made the poor call centre guy conduct a line-by-line interrogation of my insurance.
To get $879 off: Me: “There’s an iPhone 14 Pro on my policy – how much do I save if I remove it?”
The answer was $217. What was I paying to insure my son’s much older iPhone 12 Pro? That was costing $256. His MacBook Air, 2017 model: $169. My Microsoft Surface Pro – again, a dinosaur: $237.
The thing is that the cheaper cost of technology and the higher premiums for peace of mind if it’s damaged or lost mean insuring electronics is no longer worth it. Roughly, I was paying an extra $200 a year for each $2000 of specified cover.
So, I dumped all of the above insurance.
I did keep insurance for some jewellery as I would be not just devastated but a bit destitute if I had to replace it. But simply removing tech from my specified personal values saved me that $879.
I didn’t stop there, though.
To get another $515 off: My frazzled phone-mate then had to contend with: “Tell me about accidental cover versus any other type of payout” – it’s basically those ads you see with a “comedy” of costly mishaps at a house.
As such, it’s expensive, accounting for $515 of my policy. He said people with kids tend to keep this cover, and I decided it was too risky to drop.
Next in my insurance premium deconstruction, I discovered there are add-ons so cheap, why not just have them in case.
Tech insurance can significantly increase your premiums.Credit: iStock
Only costing $152: Three things fall into the “may-as-well-keep” cover.
Firstly, I wouldn’t be without some version of a rebuild safety net. It is opt-in but ensures that if construction costs spike hugely due, say, to a natural disaster and sheer demand, there is a rebuild buffer. Mine is 25 per cent… for $25! I’d venture that’s the best $25 I spend all year.
But what about the heat of the disaster moment? For me, that’s the second sensible optional extra: the emergency tradie assistance service, which costs just $59.
The third “why not” insurance inclusion is motor burnout. Sure, most policies cut out once appliances get older than 10 years, but that one represents only $8 of my overall annual premium. It’s hardly wasting money, so on that one, I stopped wasting breath.
My insurer also tries to entice you with excess-free glass cover. That privilege is only $60, but delving into the fine print, I found there is no excess on window glass anyway, and that’s good enough for me. I went without it as I have always done.
With premiums becoming so financially painful, the Actuaries Institute reports people are going without insurance altogether – or without adequate insurance to rebuild. From a risk mitigation point of view, rebuilding is all that really matters.
There is a cheaper, smarter, safer way.
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter or Instagram.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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