Welcome to our series The Cautious Optimist, brought to you by our pals at Tower Insurance, where we – forever the optimists – at Capsule look into those big life decisions you might be toying with and how to make sure you’re making the right decisions, especially if, as we’re talking about this week, you’re thinking about starting a family.
This week, Alice O’Connell looks at having babies, and how you, in this climate, can best prepare your wallet and mind for bringing a new little person into this world – including how to manage your insurance when your little one arrives!
It’s been a rollercoaster ride the last few years. Plus, with so much talk about a recession starting a family can feel like a scary step to take (even if you don’t know a lot about babies, you will likely have heard that raising children isn’t cheap!).
For those who have made ‘having a baby’ their new year’s resolution, we’ve gone straight to the experts. We talk to insurance expert Tower’s Krutika Chikara (who gives very good advice about things you may not have even thought about!) and then, for a double whammy, we talk to parenting expert Kristin Ward.
Preparing for the Unexpected: Your Baby & Your Insurance
What if the unexpected happens? That’s where having your insurance sorted BEFORE a baby arrives can make all the difference! We’ll let Tower Customer Experience Owner Krutika Chikara, explain with her three top tips.
1. Get your insurance in order before baby turns up.
Check your single item limit
One of the most common claims we see from parents is for new TVs, because of children throwing things and damaging them! It’s a good idea to check your maximum single item limit on your contents insurance before you have kids. Single item limits on policies range from $1,000-$10,000 so, if you own things like expensive TVs, furniture or appliances that your children have access to, you may need to stipulate with your insurer that you own items above your limit. This means your insurer can adapt your level of cover and make sure you’re insured for a full replacement if need be.
Case in point, the most expensive child-related claim Tower has had in recent years was for a $15,000 leather lounge suite that had been drawn on by a toddler!
Check your sum insured
If your contents are growing with new things for your baby, you may need to check that you are insured for the correct sum, it may need increasing. In contrast, if you are selling things to save money for your baby, you may be able to downgrade your contents sum insured.
Tower customers can change their sum insured at a few clicks of a button via our signature self-service My Tower platform. Of course, if you’d like to discuss your options ahead of having a baby, our customer care team are there to talk you through things every step of the way.
2. Make sure you understand your insurance
Having a baby is so exciting, it’s a time of ‘firsts’ especially for new parents.
Two really handy things to be aware of are how insurance works when it comes to travel and car seats.
In the early years, babies have low immunity, if they pick up something abroad and are unable to travel due to illnesses or if you’re unable to travel due to COVID related issues, you may have to delay, change or cancel your trip.
Travel insurance is vital in these situations – if you’re going on a holiday with your little one this summer, it’s a must. The last thing you want is to be unable to board your flight and be stranded in another country with a baby AND have to foot the bill to get home, plus extra accommodation costs.
With Tower, kids travelling with an insured adult have free cover. Make sure you check with your insurer whether children are also covered.
It’s a little-known fact that some insurers won’t cover your car seat if it’s damaged or stolen from outside the home, including your car.
Tower insures car seats under car insurance, for both comprehensive and third party, fire and theft policies. It’s worth checking with your insurer whether they will cover your car seat if it’s kept in your vehicle, as you won’t find many parents who insert and remove the car seat from their car every time they drive – who has the time or energy with a new-born!?
3. Make the cost of insurance work for you
Having a baby often means a decrease in your household income. Luckily, there are ways to make your insurance work for you and your budget.
Look out for discounts
Remember, quotes from insurers are no obligation so don’t be afraid to shop around. Make sure to take advantage of multi-policy discounts. Tower customers can earn up to a 20% discount if they have three or more eligible policies.
Lower your premiums
Did you know you can lower your premiums in favour of a higher excess? You’ll need to pay more if you do claim but while you’re down an income, all your assets are still insured with the same benefits and your premiums are more affordable in the short-term. Just make sure you’d still be able to afford your excess if you did need to claim.
Pay your premiums annually
Paying your premiums annually can also help keep costs down, most insurers offer a discount if you pay your year’s premiums upfront, instead of in instalments.
The key is to keep reviewing things at different life stages. Remember, your insurer is there to help, don’t hesitate to reach out if you need advice or have any questions at all.
Preparing To Become A Parent: How Much Stuff DO You Really Need?!
Ok, thanks to Krutika, we’ve ticked off insurance 101 when it comes to a baby now, let’s chat more need-to-know with Kristin. Kristin Ward manages the Family Coaching team at Parenting Place, and is also a mum-of-three, so she knows what it’s like in the trenches!
When it comes to preparing for a baby, what do people have to be mindful of?
Babies need stuff, for sure, but far less than you may think. And they definitely don’t need the glamorous nurseries and designer equipment that Instagram might suggest. The big-ticket items you initially need are a car seat, a pram and/or a front pack to carry baby, and a basinet, cot or pēpi-pod for baby to sleep in. Ask friends and whānau for hand-me-downs. Scour the op-shops or Trade Me for a second-hand items.
Having everything new might feel important, but it really isn’t. We bought a brand new white wooden cot for our baby girl, thinking it would last beautifully for all our future children and look lovely for years to come. It didn’t. When she cut her first teeth, she systematically scraped them against the lovely white paint work all around the top edges of the cot. Our subsequent children all had a very second-hand looking cot (and are so far turning out just fine).
Try not to go crazy buying cute little clothes for your babe. Most babies put on the equivalent of a block of butter every week and very quickly grow out of their outfits. Also, you might be amazed to see how many people buy you onesies after your pēpi is born.
Babies have the biggest impact on the budget in terms of income, leave and childcare. Can you afford to go down to one income for a while so one parent can stay home to care for baby? Parental leave entitlement is better than it used to be, (up to $660 (before tax) per week for the primary caregiver for the first six months of baby’s life) but it still often represents a pay cut. Many primary carers want to stay home for longer than the first six months too, so it’s worth planning how you will afford this.
It’s fair to say there are sacrifices when it comes to raising a child. Transitioning from the classic ‘dual income, no kids’ lifestyle can mean some adjustments especially. Think simplification rather than FOMO – Netflix on the couch instead of expensive nights out; exploring your local parks instead of weekend city breaks…
You got this!
Tower’s online portal My Tower keeps your insurance in order so you can keep things simple. All your details are online in one easy place! You can pay your premiums, check your policies, sum insured, and even make a claim, all via your personalised profile. Tower has you covered from your home, contents, car and car seat, all with great multi-policy discounts!
Visit the Tower website for more information tower.co.nz/all-insurance/