best landlord insurance?

[ChrisA1]

Hi Missgreeneyes,

The insurer for the situation I describe above is through ANZ Landlord insurance (underwritten by QBE) - I didn't know as much about LL insurance as I am learning now, but they paid out 8 months of rent loss (just over $11,000).

I called TS again today and specifically went through the above scenario for an apartment, to be told that I would have to chase the strata/building insurance company ! Go figure!

I was tossing up between EBM and TS and since EBM is underwritten by QBE and the strata/building is insured through QBE, I will go with EBM. Based on TS's comment about having to chase the building insurance for rent loss for situations that are not that uncommon... I think I might only use TS where I can get both building and landlord insurance through them (they were cheaper than EBM on building insurance).

 

[missgreeneyes]

Hi Missgreeneyes,

The insurer for the situation I describe above is through ANZ Landlord insurance (underwritten by QBE) - I didn't know as much about LL insurance as I am learning now, but they paid out 8 months of rent loss (just over $11,000).

I called TS again today and specifically went through the above scenario for an apartment, to be told that I would have to chase the strata/building insurance company ! Go figure!

I was tossing up between EBM and TS and since EBM is underwritten by QBE and the strata/building is insured through QBE, I will go with EBM. Based on TS's comment about having to chase the building insurance for rent loss for situations that are not that uncommon... I think I might only use TS where I can get both building and landlord insurance through them (they were cheaper than EBM on building insurance).

Haha, that's funny!
OK, OK, not so funny if you really needed to claim.
OK, let me look into QBE.
My strata is insured with CHU, who are underwritten by QBE. I don't have a choice in regards to the strata insurance.
I had better get away from AAMI as quickly as my little legs can take me.
TS is cheaper but I am a big advocate of the 'no free lunch' mentality. Something has to give. So, apart from the fact that they are only open M-F, 9-5 (I think a part of AAMI's premium goes into their 24 hr call centre and cheesy ads), their cover is quite skimpy as well. I found that out through reading the PDS.
AAMI cost me twice as much. Let's see what QBE comes up with then.
I'd better call suncorp tomorrow and switch. I have a 30-day cooling off period anyway.
These never ending worries!

 

[jacquelinaj]

Best Landlords Policy in my opinion

Hello,

After investing in property for the last 12 years - I have had a few claims. My issues has been with the "malicious damage" on my last claim... the tenants partner liked to hit her and hit doors as well... as the guy wasn't malicious to the property but to her... had a hard job claiming!

The most recent... interesting one... "death of a sole tenant" - existing policy through Allianz - Only will cover 6 weeks rent (I am now up to 9 so far and continuing) - they wont cover locks (son was trying to get into the home so had to take possession etc). So basically, we will get 6 weeks rent and pay $500 excess. Issue here is no one is liable for the rent for 28 days, family are meant to take everything in this time - however didnt and had to either let the family take their time or pay for storage... so nightmare either way. We got posession, cleaned up and this is 8 weeks later....

I have rang around - Terri Scheer - 15 weeks maximum cover on this - wouldn't cover any damage as that was accidental (the tenant was sick, broke the oven door and a few other things) and likely not the locks as usually only covered in malicious or tenants leaving and keeping keys etc.

EBM - will cover for up to 52 weeks. They would likely cover the locks and under accidental damage some of the other things that have really added up! Plus no excess for loss of rent claims and $400 for accidental damage per claim. All in all - so far the most comprehensive policy out there for the more unusual claims - also to remove the argument re "Malicious and accidental" as both are covered! Cost wise $848 for my place in VIC including $50,000 contents and building at $220k. Currently paying $598 for same building and contents at $10k. All in all - excesses and coverage is the best I have been able to find after ringing all companies. Trust me - pay for quality.... as when you need to claim you want certainty... This one (death of a tenant) we are up to $5,000 in loss of rent, carpet cleaning, garden maintenance, cleaning the home, removal of furniture and re-letting costs... and its still ongoing.

If anyone finds anything better - would love to know!

 

[jrc77]

I am seriously considering self insuring for my landlord insurance. I will have three landlord insurance policies (for two IP's - one with a granny flat and was told by my insurer that this requires two policies) and am thinking of setting up an online savings account or indexed managed fund and transferring the equivalent of the landlord insurance policy into it each month.

Separate building insurance would be maintained on the properties.

Would have the advantage of making claims easier - no arguing with insurance companies. Over time I think I would be better off - it's just whether I accept the risk of a big issue in the first year or two before I have built up a significant pool of money.

Regards,

Jason

 

[brettc]

I am seriously considering self insuring for my landlord insurance. I will have three landlord insurance policies (for two IP's - one with a granny flat and was told by my insurer that this requires two policies) and am thinking of setting up an online savings account or indexed managed fund and transferring the equivalent of the landlord insurance policy into it each month.

Separate building insurance would be maintained on the properties.

Would have the advantage of making claims easier - no arguing with insurance companies. Over time I think I would be better off - it's just whether I accept the risk of a big issue in the first year or two before I have built up a significant pool of money.

Regards,

Jason

I'm somewhat intrigued as to what you may consider building up a "significant" pool of money to handle a "big issue". The landlord insurance component of a policy may be from say $250-$350 per year per property (depending on location and insurer), these costs being tax deductible, so essentially your premium pool may be around $500-$600 per year across the three properties. Unfortunately very simple claims/losses often run into thousands of dollars, and here you would be at risk for three properties.

"Big issues" include meth labs, these can be very expensive, but there are plenty of simple scenario's that can cost many thousands of dollars.

I recall the early days of landlord insurance, commencing when I did back in 1991, and for a number of the years after that the premium pools ran at or near a loss until well down the track when there was what was considered an adequate premium pool, but we are talking hundreds of thousands of dollars or in reality even millions before that was the case so as to handle the bumps of major claims.

I can only suggest that self-insurance is a very dangerous path to follow unless you have a very significant number of properties, or an awful lot of money behind you.

 

[CHAOS]

I recently went to sign up for TS after browesing their website and reading the PDS etc. I also had an application form at my side from the REA. The website advertised Buy Online save 5% apply now.

So I clicked apply now, filled in all the details, get to the summary page and it says Credit card payment is required for your online application to be submitted to Terri Scheer Insurance, should you require alternative payment methods please call us on 1800 804 016.

I can't pay by credit card because I wish to use my LOC and keep investment and peronal money separate so I rang the number.

I was told they could insure me but they would have to do it over the phone and then I can pay by Bpay but I will not get the 5% discount. I then referred them to what their wesite clearly states and was told NO - no discount. I did not proceed.

It is a whole $30 discount for 2 policies - so not a great deal. So on both sides - TS - wouldn't budge even for PR to get business and
ME on principle becasue their website clearly said call to pay by other methods. Their apply now link did not say credit cards only accepted. T
hey have said that they will speak to the people who do their website but will not give me the discount.

If they are unrelenting in a 5% discount then how will they go when making a claim?

 

[Peter 14.7]

You can pay via CC and then note it as business expense and reimburse the card from your LOC. Just keep a clear paper record and best to clear card each month. We have done this for years and never and issue with ATO. Get the TX billed to the owner of the property of course.

Regards Peter 14.7

 

[brettc]

I recently went to sign up for TS after browesing their website and reading the PDS etc. I also had an application form at my side from the REA. The website advertised Buy Online save 5% apply now.

So I clicked apply now, filled in all the details, get to the summary page and it says Credit card payment is required for your online application to be submitted to Terri Scheer Insurance, should you require alternative payment methods please call us on 1800 804 016.

I can't pay by credit card because I wish to use my LOC and keep investment and peronal money separate so I rang the number.

I was told they could insure me but they would have to do it over the phone and then I can pay by Bpay but I will not get the 5% discount. I then referred them to what their wesite clearly states and was told NO - no discount. I did not proceed.

It is a whole $30 discount for 2 policies - so not a great deal. So on both sides - TS - wouldn't budge even for PR to get business and
ME on principle becasue their website clearly said call to pay by other methods. Their apply now link did not say credit cards only accepted. T
hey have said that they will speak to the people who do their website but will not give me the discount.

If they are unrelenting in a 5% discount then how will they go when making a claim?

To be honest that's just dumb business (in my opinion), but is likely to reflect the inflexibility of being owned by a major insurer. Having a good policy is just the first stage, customer service is critical. I know how we've treated similar situations (not that we require immediate payment for the online discount we offer anyway) and it is certainly nothing like that.

Unfortunately sometimes companies lose sight of the idea of making the buying experience enjoyable.

 

[jim1964]

Not Good!!! From past experience.

 

[Peter 14.7]

Not Good!!! From past experience.

Please expand. Interested as we have all insurance with TS?

Peter

 

[jim1964]

Going back to 2002,1st IP,so green as.Tenant skipped owing 5 weeks rent,which was paid out by policy.The carpets had many multi coloured Marks on them,numerous holes in walls,irrigation system for garden ripped up,2 full skip bins of rubbish removed,curtains destroyed,Drawings waist height on walls throughout
The issue at the time was each of the acts of damage was deemed a seperate incident being caused at different times,therefore attracting the applicable excess for each incident,which blew it all right out of the water.

 

[Peter 14.7]

Going back to 2002,1st IP,so green as.Tenant skipped owing 5 weeks rent,which was paid out by policy.The carpets had many multi coloured Marks on them,numerous holes in walls,irrigation system for garden ripped up,2 full skip bins of rubbish removed,curtains destroyed,Drawings waist height on walls throughout
The issue at the time was each of the acts of damage was deemed a seperate incident being caused at different times,therefore attracting the applicable excess for each incident,which blew it all right out of the water.

Ouch, totally unfair and very concerning.

I may ask this sort of question on the QT with TS and see how it is treated.

But this sums up insurance overall. A lot of BS!!

Obviously items may or may not be damaged at separate times but as landlord how are you meant to know that? And it is irrelevant. Tenants does a runner, leaving damage, thus damage should be fixed

And I thought AAMI was bad.

Any comment on how EBM treats this BrettC?

regards Peter 14.7

PS I never forgot when i got my first insurance with NRMA for house cover and the precluded water craft. I said so is my surfboard covered? They said Yeah!!! then checked, NOPE it floats thus is watercraft, not covered. They then said are you with Choice or the Government? I said no just very cynical of you guys.

Only time we never had issues was a roof claim due to Sydney Hailstorm of 1998. Because we were only $15k they paid out regardless as it was too small in the scheme of damage to argue.

 

[mattysavager]

Going back to 2002,1st IP,so green as.Tenant skipped owing 5 weeks rent,which was paid out by policy.The carpets had many multi coloured Marks on them,numerous holes in walls,irrigation system for garden ripped up,2 full skip bins of rubbish removed,curtains destroyed,Drawings waist height on walls throughout
The issue at the time was each of the acts of damage was deemed a seperate incident being caused at different times,therefore attracting the applicable excess for each incident,which blew it all right out of the water.

With all due respect, that was pushing 11 years ago. A lot can change in that time.

I deal with a lot of insurance companies and a lot of claims. It has been my experience that TS is one of the few who do not charge multiple excesses for separate instances of damage. I also find Allianz to be easy to deal with and generally pay out higher values than the big banks.

In response to the post a few up about credit card payments, Terri Scheer had until recently dealt exclusively with agencies, and we pay on account. They have only recently started dealing direct to the public, and their payment methods may need to be re-considered. We jumped through hoops to be a registered distributor and have 300 policies with them and they trust us to pay on account.

 

[Peter 14.7]

With all due respect, that was pushing 11 years ago. A lot can change in that time.

I deal with a lot of insurance companies and a lot of claims. It has been my experience that TS is one of the few who do not charge multiple excesses for separate instances of damage. I also find Allianz to be easy to deal with and generally pay out higher values than the big banks.

In response to the post a few up about credit card payments, Terri Scheer had until recently dealt exclusively with agencies, and we pay on account. They have only recently started dealing direct to the public, and their payment methods may need to be re-considered. We jumped through hoops to be a registered distributor and have 300 policies with them and they trust us to pay on account.

Thats encouraging but it does require some knowledge and trust. WHi si the best in your opinion as we are all sceptical here and only have contact when a claim is made.

Thanks, Peter

 

[mattysavager]

Please note that I am not giving out insurance advice, and I don't have any commercial arrangements with any of these companies:

I recommend TS to clients for a number of reasons:

• Premiums are fixed and do not increase based on number of claims
• Limits on weekly rental loss are extremely generous and increase if the tribunal makes an order against the tenant
• Separate instances of damage are covered by one damage excess (ie 5 rooms of destroyed carpets are not classed as 5 separate claims with 5 excesses)
• They will allow me to organise trades and then will pay the claim to my real estate trust account, rather than insisting on paying the invoice direct, which can be an accounting nightmare.
• They can pay rental loss claims by installments in some cases, so clients have somewhat continued income rather than waiting 3 months for a bulk pay-out
• They do not automatically deduct the value of the bond from any claim paid

Now I am not saying that they are the only insurance company that does these things, but they seem to do a much better job at keeping my clients happy when we need to claim. I have recently had a claim with S*****p who saw it fit to take 4 excesses for 4 separate damaged surfaces, only pay out 6 weeks of rental loss even though the place was trashed and not able to be rented for 12 weeks, and then reduced the claim by $2400 as that was the value of the bond (even though this had already been spent on cleaning, which no insurers will cover). That owner ended up thousands of dollars out of pocket.

I know everyone has horror stories about insurance, but it has been my observation that TS clients have fewer such stories.

Also (and this won't apply to most of you), but Terri Scheer will tell us what our loss ratio is: 17% - we are claiming back 17% of the total annual revenue that we direct to the company. This is according to them, very low - and as such they are more willing to negotiate with us when we are not entirely happy with a decision on a claim. Obviously for a normal investor with a few properties - you don't get the benefit of this, but as an agent I do appreciate that small business service.

Matt

 

[Peter 14.7]

Thanks Matt.

You know, in the end, any serious investor pays insurance and does not mind paying a higher price for a better cover. Saving $200 a year is nothing is your place is trashed to almost $30k as one of mine was. And also, all tenants can go bad. Even good ones get dumb boyfriends and into the drink and drugs, etc..

Thanks for the frank feedback, kudos coming, Peter

 

[mattysavager]

That's just it.

Agents usually get blamed when a tenant turns bad, but we don't put 'bad tenants' in our properties. You can only learn so much about someone by meeting someone twice and looking at their financials.

Plenty of tenants are great for 2 years then turn crazy. Just like people's husbands and wives turn crazy.

I have landlord insurance. If didn't think it was worth it, I wouldn't have it.

 

[rowena]

Ebc doesnt cover flood.

Anyone dealt with AON?, there coming up best value for me, and have had 3 different agents recommend them.... and they cover flood..

my house is not in a flood area from what i can see... but flash flooding can occur in new estates thanks to the change in landscape and all that extra roof space putting water back into the floodways etc, so i'd rather be covered then not..

Ill be taking both contents and building cover for a house.

 

[mattysavager]

Terri Scheer also doesn't cover flood.

We have about 10 owners with AON - and their flood extra premium is huge. One property is in a 'flood suburb' (but would never flood as it's on a hill) and the premium went from $289 to $2,799. Depending on the premium they give you, I don't mind AON.

I probably wouldn't personally pay an extra $2500pa on the chance of flash flooding, but I don't know your property or location, so just do your research.

 

[tonyc]

Landlords insurance

Any comments regarding westpac landlords insurance.

I have been offered $322 for basic westpac standard policy compared with EBC of $330.

The argument in favour of westpac is that, as the loan provider, they hold security over the property therefore have an keen interest in maintaining that the property is fully insured (at least that's the argument put forward to me).

Regards

Tony