Insurance questions

Hi all,

Just signed for IP n 1.
Got few questions on the list of insurances that we should take (unit)

Life and disability - Sorted - $300k + and have $100k on debt on PPR and most probably around $2k to $3k per annum of neg cash flow for IP#1

Health - Sorted (basic cover at this stage, for tax advantages)

Income protection insurance - Do you use them? Are they really good/essential to take?

Landlord insurance (inc rent insurance)- I have seen lots of post around it. What does it cover exactly? I m still really lost !

Building insurance - Same with Liability insurance - How can I know that level is good within my body corp
Do I need to insure something else for my unit or is it something I would have to take through Landlord insurance to cover my internal walls and fittings?

Content insurance - PPR and IP#1 - Are they really necessary in both cases?
In my PPR, I have most likely less than $20k in value. Or does it cover carpet, blinds, kitchen too?

All these questions might sound silly, really lost in all these types of insurance.

Thanks for your help !
 
If buying into a strata property you don't need to arrange building.insurance, that is organised and paid for by the BC.

As for landlord insurance, it's generally less than one weeks rent per year, if you do a search, you'll see Terri Scheer and EBM are the two that are highly regarded.
 
I would suggest income protection insurance is essential to anyone who owns investment property. What happens if the IP is empty and you're out of action? What if you get cancer and have a year of being unable to work? How does the mortgage get paid - even just the shortfall?

To me, income protection is an essential part of risk management.

There are a huge range of products available, varying from very simple loan protection to much more comprehensive cover.
 
I think it depends what makes you feel comfortable -

we don't have income insurance but this is mitigated by:
- having IPs that are positive geared
- big buffer in place in case of emergency

We also have TPD and Life insurance just in case there is an accident or disability that prevents us from working and the cover is enough to pay out the properties.

Landlord insurance/building insurance/contents insurance - again, this is individual risk management.

In a unit building/strata block you are not going to need building insurance (you can ask your strata manager for a copy of the currency certificate/policy to see what it covers).

Landlord insurance - may/may not cover fixtures. it depends on the policy for some insurers you may need to get contents cover for those things. It also depends if it is a furnished unit or just regular residential. You may want landlord insurance esp. for things like rent arrears. In an investment this cost is tax deductible and may minimise loses if you get a nightmare tenant. Some people say that if you are proactive in management then you don't need landlord insurance.
In Sydney with the recent storms I am sure a lot of people are claiming on contents insurance for things like water damage.

My 2c -- have a read about what the different insurances cover and decide what is important for you to have to mitigate risk and make you feel comfortable.
 
Thanks all for your responses
Working on it now

Seems that I have some luck as my employer has negotiated nicely for us already. Need to complement.

As for landlord insurance, looking at doing some quotes now..
 
Is anyone able to share some of the good income protection providers to look at?

Are there any that provide cover for loss of employment?

( although I would have a fairly healthy retrenchment package to fall back on - I have been with my current employer since the 90's )

I do have death and total permanent disability cover as part of my superannuation, however need to see whether that is enough cover.
 
Content insurance - PPR and IP#1 - Are they really necessary in both cases?
In my PPR, I have most likely less than $20k in value. Or does it cover carpet, blinds, kitchen too
Unless you're a uni student, I'd be very surprised if you had < $20K of contents. An average suburban family is now around $100-200K, though many people find - too late - that they're under-insured.

It doesn't cover fixed kitchen cabinets, but usually does cover all carpets and window treatments. That's without starting on all the whitegoods, electronics, clothes, books, media (games, Blu Rays, etc.), tools (lawnmower, whipper snipper?), linen, beds, sofas, etc.

You also have to remember that it's the replacement cost as new that's important. You can't say "I can replace my lawnmower on gumtree for $50, so I'll just insure it for that".

You also can't decide that you're happy to only insure some of your stuff, unless you're willing to only be able to make a claim in case of catastrophic loss of everything, e.g. major flood or fire, otherwise you risk having your claim denied due to under-insurance.

e.g. If you have stuff that'd cost you $100K but that you'd only want to replace 10% of it, and you only take out a $10K policy, you're 90% under-insured. If you lose the lot, yes, you'll get $10K. If you have a $10K loss, say due to a fire contained to one room or something, you'll likely only get $1K, because you only insured 10% of the stuff in that room.
 
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