Insurance Questions

I have two properties to insure and both will be rented out.

One is a house and the other is a 2 bdr unit.

With the unit, from what I understand there is no need to get insurance as Strata fees cover this including fire etc.

So I would just need fire and disaster insurance for the house and possibly landlords insurance for both properties? Is there any other insurance I should get? There is no valuable furniture etc in them so I don't want to get content insurance.
 
Obviously the house will need to have regular insurance. The body corporate should have building related insurance over the unit.

I'd advise that you get landlords insurance for both properties. The body corporate won't insure things like carpet and fittings.

Most landlords insurance policies should have options for covering stand alone houses or buildings already insured through a BC.
 
I'd advise that you get landlords insurance for both properties. The body corporate won't insure things like carpet and fittings.

I wonder if it is worth the extra expense? The unit has some pretty worn, ugly carpet including old shagpile but because the current owner is going to stay on and rent it out with her little tiny dog then I won't need to change it as they are happy with it. The house has wooden floorboards. Both properties don't have much in the way of fittings either. The unit does have a new air conditioning system and stove though!

So I would only be really getting LL insurance to mainly cover for lost rent but maybe I would save more in the long term by not bothering and just making sure the Property managers so their job?

Then I would only have to buy general insurance to cover fire for my house.

What do you think about this?
 
Monsoon, I know where you're coming from. Claims on landlords insurance are rare and lost rental income is usually only for 2-3 months. The savings by not having insurance can cover this.

What if the tenant trashes the property and it costs tens of thousands to repair? General insurance under the body corporate won't cover internal damage.

If the tenant does something stupid and hurts themselves and it ends up as a public liability claim, the Body Corporate insurance will only cover it if it occurs on the common ground, not inside the unit.

At the very least, I'd suggest getting landlords insurance for the first year of a tenancy. This is probably the highest risk period, I'd rather be covered than not.
 
I wonder if it is worth the extra expense? The unit has some pretty worn, ugly carpet including old shagpile but because the current owner is going to stay on and rent it out with her little tiny dog then I won't need to change it as they are happy with it. The house has wooden floorboards. Both properties don't have much in the way of fittings either. The unit does have a new air conditioning system and stove though!

So I would only be really getting LL insurance to mainly cover for lost rent but maybe I would save more in the long term by not bothering and just making sure the Property managers so their job?

Then I would only have to buy general insurance to cover fire for my house.

What do you think about this?

Just make sure you are aware of the risks. Some things that can (and have) happenned:

Damaged doors, walls (holes), kitchen, etc...

Serious damage to wooden floorboards (including water, gouging)

Drapes/Blinds: missing/damaged

Light fittings: taken - by force usually leaving hole in ceiling

Illegal water works (for growing ur... "plants")

Boarded up (with glue!) windows for "darkrooms"

Missing fireplace insert

Months on end (6+) of no rent as eviction drags on and/or repairs are done

Remember your tenants may have "guests", and "guests of guests" that no property manager can track.

Cheers,

The Y-man
 
For the unit, it will cost you $325 odd with up to $50k coverage for built ins, air conds, fittings etc. The strata insurer will only cover from the walls out so anything else is up to you.
 
So I would only be really getting LL insurance to mainly cover for lost rent but maybe I would save more in the long term by not bothering and just making sure the Property managers so their job?

By the time you find out a PM is not doing their job, it's too late.
 
Monsoon, I know where you're coming from. Claims on landlords insurance are rare and lost rental income is usually only for 2-3 months. The savings by not having insurance can cover this.
2-3 months seems a long time to go without rent. I would want to have rent prepaid, wouldn't most people be doing this? If they go over two weeks without paying then I couldn't I throw them out?

What if the tenant trashes the property and it costs tens of thousands to repair? General insurance under the body corporate won't cover internal damage.
With the unit I'm doubtful the current owner and soon to be tenant is the type to trash the property and she has a quiet asian flatemate. With the house, I will be making sure the agent get's someone who has plenty of references etc in although it's not in the best area so finding top tenants might be difficult. Maybe we can get an older couple in. But the house is quite old even though I have painted it etc so if damage is done it won't be too serious I hope. The only problem is having to pay someone to fix it as I won't be around.

If the tenant does something stupid and hurts themselves and it ends up as a public liability claim, the Body Corporate insurance will only cover it if it occurs on the common ground, not inside the unit.

At the very least, I'd suggest getting landlords insurance for the first year of a tenancy. This is probably the highest risk period, I'd rather be covered than not.
So I'm also liable if they hurt themselves in my properties, in that case it does get risky so I might have to get LL insurance just to cover that anyway.

Just make sure you are aware of the risks. Some things that can (and have) happenned:

Damaged doors, walls (holes), kitchen, etc...

Serious damage to wooden floorboards (including water, gouging)

Drapes/Blinds: missing/damaged

Light fittings: taken - by force usually leaving hole in ceiling

Illegal water works (for growing ur... "plants")

Boarded up (with glue!) windows for "darkrooms"

Missing fireplace insert

Months on end (6+) of no rent as eviction drags on and/or repairs are done

Remember your tenants may have "guests", and "guests of guests" that no property manager can track.

Cheers,

The Y-man
No fireplace or curtains to worry about. Light fittings, nothing much there or anything else like that besides what I mentioned before that the unit has an air conditioning unit and a new stove. I will probably put a cheap new stove in house as current one is not working properly. Other than that I would be just looking at damage to walls etc which I could normally fix myself but as I will be overseas then I would have to pay people to do that which could be expensive. The loss of rent is also a worrying thing.

For the unit, it will cost you $325 odd with up to $50k coverage for built ins, air conds, fittings etc. The strata insurer will only cover from the walls out so anything else is up to you.
That is nearly $30 a month, X 2 means another $60 a month just to cover damage then it could be a lot more for LL insurance as well.

By the time you find out a PM is not doing their job, it's too late.
Well, as I only have 2 properties I will be keeping updated all the time even though I will be overseas. My biggest worry is if something breaks down and I have to pay for a handyman and from what I know about them they will charge hundreds of dollars for a few minutes work. Or it could be a plumber, Electrician etc to fix things but I doubt insurance will cover if the toilet or lights break down?

So I might as well either pay most likely around $100 a month to cover both properties or the alternative is to just put that money into bank account. :confused:
 
That is nearly $30 a month, X 2 means another $60 a month just to cover damage then it could be a lot more for LL insurance as well.

I was more talking about the unit insurance.

$325 is what I pay to insure my unit through EBM. It covers the rent loss component as well as other listed events such as escape of water, storm, fire, theft etc. You do not need seperate buildings insurance for your unit as the strata will have this covered, but only to a certain extent.

For my house, its around $800 which includes loss of rent, buildings insurance, malicious damage by tenant cover as well as fixtures and fittings.

Remember that the insurance is tax deductible too.
 
Monsoon if you have a tenant who decides not to pay rent and knows the rules around eviction, it can easily take 2-3 months to get them out. An evicted tenant isn't likely to clean up after themselves when they leave and I know from personal experience that the bond won't cover your costs.

And no, you can't throw a tenant out after missing a payment. At that point you can send them a letter. An eviction process takes at least 30 days, but a savvy tenant can easily make it a lot longer.

Public liability can be an issue. If there's a problem with the property that you didn't have fixed and it causes an injury, you could be found liable. These sorts of claims can run into hundreds of thousands or a lot more.

Does your flat have hot water? I lived in a flat once where a pipe on the hot water system broke. We were out at the time, so it was pouring water onto the carpet for over an hour before we got to it. The carpet was ruined and the hot water system needed to be replaced.

Better yet, the water then leaked into the unit below, causing damage to their walls & carpet. There was nothing neglegent on anyone's part, but the total bill would have come well over $5,000 (two sets of carpet, new plaster & painting the walls below, new hot water system). Body corporate insurance wouldn't have covered this as the cause was internal.

Insurance is something you expect you'll never need, but when you do, you're really greatful you've got it. $30/mth is well worth the peace of mind.
 
I got a quote from EBM:

  • LL insurance for house $330 per year
  • LL insurance for unit $330 per year
  • House & Contents Insurance for house $640

Total: $1,300 or $108 per month

Do you know of any other Insurance companies I should also try that could be competitive in service and price?
 
I found out that I can get full house & LL insurance with EBM for about $580 although that is depending on how much it would cost to rebuild my house? My house is valuated at around $170,000 before completion of renovations which should add another 10k. So I just guessed and got quoted on $120k for the house without including the land. How do others value the house without the land? I mean this house was built in 1960, I have no idea how much it would cost to build it now?

Westpac who I already have house & contents insurance offer some good prices but I'm not sure about the fine details and excess seem to be high unless I pay more. They will also let me pay monthly so I can stop any time if needed.

EBM would rebate my 1 year payment if I decided to stop after 6 months for example with a $18 cancellation fee. So that seems quite good in case I want to stop it.

Any other insurance companies I should get quotes from?
 
just a quick question...got an IP, it has home and contents insurance, do i need landlord insurance or does home n contents cover it??
 
just a quick question...got an IP, it has home and contents insurance, do i need landlord insurance or does home n contents cover it??

I have been making calls to Insurance companies and Banks in last few days and from what I understand it is not the same. But if you ask for LL insurance then it usually includes Home insurance.
 
just a quick question...got an IP, it has home and contents insurance, do i need landlord insurance or does home n contents cover it??


If you have buildings and contents insurance similar to what you'd have for your PPOR, then it would coverlisted events such as storm, flood, fire, escape of water, theft etc.

Landlords insurance (depending on the type of policy) can be just rent default, malicious damage by tenant etc or can be a listed events policy with the addition of tenant coverage.
 
I mean this house was built in 1960, I have no idea how much it would cost to build it now?
Why not ask your PM?

The cost to rebuild may not be the same as the property value less the land value.
I bought my IP for 300K. I asked my PM how much should i put for the total replacement value when applying insurance. He told me 250K. Definitely, the land is worth much more than 50K.

Hence, property value is definitely not = land value + replacement cost

The rebuilding cost will be much higher today compared to 30-40 years ago.
 
Guys I'm looking at this also
without reading the fine print for an IP with EBM "Rentcover platinum" that covers similar to an RAC/HBF/Whoever... or do you need both?
sorry if its been covered before.... long day!
 
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