New research released by Sum Insured in June showed that the actual cost of replacing household contents in the event of an insurance claim has remained relatively stable in the past year.
Sum Insured’s Australian Residential Contents Index (RCI) provides a statistical measure of the movement in household contents replacement costs.
“Our research found that replacement costs have increased by an average of just 1.1% in the past year,” said Mike Bartlett, Sum Insured’s Commercial Manager,
“The stability in the index reflects the current low inflation environment. The results are comparable to CPI, which recorded a 1.3% increase for the 12 months to March 2019.”
The index tracks home contents you would expect to find within a typical three-bedroom home across three price points – average, quality and prestige – including appliances, homewares, furniture, AV equipment, window and floor furnishings, computers, clothing and jewellery.
“We monitor changes in prices on a daily basis from a wide cross section of retailers and suppliers. This enables us to provide the insurance industry with the most comprehensive and up-to-date replacement cost information in the Australian market,” said Bartlett.
“More significant increases were seen for household contents in the mid or quality standard range, with costs rising by 3.4%. This contrasted with a decrease in replacement costs for contents in the lower or average standard range, which were down by 1.2%.”
Sum Insured’s research showed that in the past 12 months, there were increases in the prices of electrical appliances, women’s clothing, computers, mobile phone equipment, floor furnishings, garden supplies, jewellery, kitchenware, luggage, auto/ building tools and children’s toys.
However, these increases were partially offset by price decreases in AV equipment, men’s and children’s clothing, furniture and window furnishings.
Sum Insured specialises in the research and production of contents replacement cost information and calculation systems for home, commercial and rural insurance sectors both in Australia and New Zealand.