100% increase in landlords insurance premium

[Eagle]

The annual building insurance on two apartment complexes in which I have an interest has just been renewed for $6,000 and $9,000 less than quoted by the original broker.

It certainly pays to shop around and if you don't want to do the phoning around yourself just try another broker as we did. It seems to still be a very competitive market and it doesn't hurt to play one broker against the other. Some insurance companies like Zurich are just not interested in certain areas of the market and so have priced renewals ridiculously high in order to offload business they don't want. You definitely don't want to deal with a lazy broker.

Cheers

Body Corporate insurance - unit complexes - this market seems to be totally controlled by one company (CGU /QBE as parent company) and rates just go up each year with a 20% commission to the body corporate secretary? I have used our main earthworks company broker and he has done the same and remitted all the kickback commisison (20%).. this can amount to $8,000 commission for 1 phone call as commission. this appears to be another protected industry, operating under the radar.

can anyone advise of other companies that do body corporate building insurance?

 

[AlmostBob]

Thanks. I thought homebuilders could build a brand new brick house for $180k these days, was told the rates psm they are doing now go as low as $900-1000 psm when I have been through displays in new estates. As my place is an old highset timber house not brick, I thought that was enough to cover replacement costs.. Will check and bump it up if required, thanks.

Its a rebuild, so add in
(all or some of)
asbestos search and removal, permit, demolition, site clearance, soil stabilization, dug-out foundations, new site survey,
+ some I doubtless forget
then begin the build ::

 

[devank]

Also $160-180K will not rebuild your house if it burns down. Check that NOW. You need replacement value otherwise you are under insured.

Last week, NRMA came up with the figure of $490K as replacement cost for a 4 bedroom house! However, I decided to set it at $350K. So it can be seen as 'under insured' from NRMA's point of view. Can you refuse to pay the $350K arguing it is under insured??

 

[AlmostBob]

Last week, NRMA came up with the figure of $490K as replacement cost for a 4 bedroom house! However, I decided to set it at $350K. So it can be seen as 'under insured' from NRMA's point of view. Can you refuse to pay the $350K arguing it is under insured??

they can refuse to pay all the expected amount

insured amount 350k, insurers valuation 490k
damaged 60% expected cheque 350k x 60% = $210k
total destruction expected cheque $350k
insurer payout
damaged 60% 350k x (350/490) x60%= $150k oops 60K
total destruction 350k x (350/490) = 250k oops 100k

https://www.moneysmart.gov.au/managing-my-money/insurance/home-and-contents-insurance
https://www.moneysmart.gov.au/manag...and-contents-insurance/risk-of-underinsurance

edit:actual prices info

 

[devank]

Thank you for that info Rob. Sales person (at NRMA) couldn't give me an answer.

 

[jaspersmum]

And you may all save lots of money on your premiums but when it comes to a claim with the direct insurers then you are on your own. I am a general insurance broker and I have broker sold policies on my own places as I have seen and heard too many disaster stories about the direct insurers.

 

[jaycee]

I'm joining your club with EBM. A $600 odd renewal last year has escalated to $850 this year. Hmmm

Do you guys know how much is for landlord's insurance & how much is for building insurance ?

 

[Seeka]

Due to insurance premium increases I have changed my combined building/landlord insurance policies over to Honan. Have found them to offer competitive pricing and inclusions that I am happy with.
Haven't had a claim though so don't know how they'll perform when it comes to the crunch.

Allianz wasn't too bad for pricing but still higher than Honan.

 

[Magnum9]

Just a warning with Terri Scheer on malicious damage, they only pay $500 maximum per claim for damage to building or contents minus your excess (conveniently $500) minus any bond which makes the policy worthless. That is what is in the PDS for self managed properties at least, haven't checked the others.

Out of all my quotes AAMI is the best so far for self managed in Perth. No payout limits, only the maximum insured value.

 

[ScottyR]

I have been reading through and thought I could offer some additional information as I work in the insurance industry.

Under Insurance
Most residential insurance policies do not contain under insurance clauses. Therefore if you submit a building claim and it is found under insurance exists, your claim will not be deducted. It will still be subject to the maximum benefit of the sum insured plus any additional benefits.


Sums Insured
Do not get caught up basing your sum insured on what a new project home can be built for. It is much more costly repairing a home than it is to build it from the ground up. Only a small % of claims will be classified as a total loss. Remember to include for all property improvements that are covered under the policy in your calculation e.g. fences, paving, driveways, retaining walls etc. Some of these external items can be costly. Adding say $50K to your sum insured will have little effect on the cost of your premium.

Demolition was mentioned in a post, not all policies will have an additional benefit for demolition / removal of debris. When this does exist it will be stated along the lines of "maximum 10% of the sum insured". Therefore in a total loss situation if a property contains asbestos, this benefit will be reached quickly with the remainder of the cost coming from your sum insured.


Malicious Damage
I see many tenant malicious damage claims declined. This in most instances due to tenants having failed to maintain the property (e.g. large stains / tears in carpet, broken windows, scorched bench tops). It will be up to you to provide a case that the tenant has acted "maliciously" and not just failed to take any care or undertake any house keeping.

 

[Magnum9]

Malicious Damage
I see many tenant malicious damage claims declined. This in most instances due to tenants having failed to maintain the property (e.g. large stains / tears in carpet, broken windows, scorched bench tops). It will be up to you to provide a case that the tenant has acted "maliciously" and not just failed to take any care or undertake any house keeping.

Would this not be covered under accidental damage?

 

[devank]

Do not get caught up basing your sum insured on what a new project home can be built for. It is much more costly repairing a home than it is to build it from the ground up.

Why would you repair if a new build is cheaper?

 

[ScottyR]

Would this not be covered under accidental damage?

Some aspects possibly, depending on the wording in your policy.

 

[AlmostBob]

Why would you repair if a new build is cheaper?

it is NOT a new build, can't be a new build, there is a wrecked house on it
demolition and reconstruction,
find 3 sheets of asbestos board behind the chimney,, $Ka-ching
prior posts list possible other costs involved in clearing to the point where you can start a 'new build'

 

[ScottyR]

Why would you repair if a new build is cheaper?

If a property can be rebuilt cheaper and as timely as repair then you wouldn't. However here are a couple I have come across:

1. Change to planning laws - Where the current size, type of development would not be able to be put back in it's current form if demolished and had to go through the planning process again.

2. Insured's decision - The Insured may elect to have it restored in it's original form even if a new equivalent house is a lessor cost.

3. Time & other costs: A repair might take 12 weeks as opposed to a complete rebuild including approvals might take 40. In a loss of rent situation, if the extra time pushes the LOR plus the rebuild cost above the repair cost, the Insurer will pay the lessor.


Each claim has to be assessed on its individual circumstances.

 

[nww]

I have 3 properties insured with Tica Insurance NSW cost $265 year QLD $225 a year other states a bit cheaper and comes with 15 weeks rent default as well as many other benefits all investors I recommend.

They will not insure if it is asbestos walls or roof.

 

[Khadija]

we have encountered a similar increase in rental property insurance. We have received a renewal invoice from ebm for a rental property in brisbane. Last year we paid $672 for both building & landlord insurance, this year the premium will be a whopping $1,142 . So, i guess we will have to phone around for new quotes. We would appreciate some suggestions please! Thank you.

you will find that most premiums increased ridiculously due to the flood levy - i know of a case where it was $700 for building then went to 2100 -so you are better off just calling two-three others and saving - 50-65%. Good luck!