Land Lord Insurance
- Thread starter cgw
- Start date
Hi,
If you're active in you're investments, i fail to see why you would bother with landlords insurance.
Having said that ...if you expect your investments to grow and be without any hiccups without your attention, then i'd be getting all the insurance i could.....
terri shear was the 1st to introduce landlord insurance and as far as i know does a reasonable job.
rossv
If you're active in you're investments, i fail to see why you would bother with landlords insurance.
Having said that ...if you expect your investments to grow and be without any hiccups without your attention, then i'd be getting all the insurance i could.....
terri shear was the 1st to introduce landlord insurance and as far as i know does a reasonable job.
rossv
I use AON Landlord Insurance throughout my portfolio spread across different states. I've had no problems with them what so ever.
As with any type of investment the pro active investor IMHO should always look to Maximising cashflows and minimising risks. The use of landlord insurance is just one tool at an investors disposal as part of his/her risk minimisation strategy.
Hope this helps.
As with any type of investment the pro active investor IMHO should always look to Maximising cashflows and minimising risks. The use of landlord insurance is just one tool at an investors disposal as part of his/her risk minimisation strategy.
Hope this helps.
Personally, I ALWAYS have landlord insurance (I Use Terri Scheer and Aon).
Why take the chance? Rossv, I'm assuming you're talking about 'if you're actively managing your investments you should recognise issues before they arise' but that only covers some tenant issues. What about break-ins, fires, etc? Or legal liability? For me, I would suggest that every investor buy landlords insurance. I've made claims over the years (tenants absconding, etc) and it's well worth the $250 or whatever a year that it is.
Alex
Hi Folks
The only reason I have any kind of home insurance is because it is usually a criteria to be met by lenders. It is just a cost to doing business so I take measures to reduce that cost to a minimum. I know a lot of folk would disagree with my strategy and that is OK but I think I just had to put forward my 2 cents worth for those brave folk that regard fear based enterprises counter productive and restrictive to positive action. I would be then able to apply that money to a more positive endeavour.
Some might also say what if your house got damaged or burnt down. I would say if you where like me and only bought the property for its potential land value increase (because really that is what property investing is fundamentally about) then the above scenarios although unpleasant and unwanted would not hold the dire horrors that some with a more superficial view might own.
Simon
The only reason I have any kind of home insurance is because it is usually a criteria to be met by lenders. It is just a cost to doing business so I take measures to reduce that cost to a minimum. I know a lot of folk would disagree with my strategy and that is OK but I think I just had to put forward my 2 cents worth for those brave folk that regard fear based enterprises counter productive and restrictive to positive action. I would be then able to apply that money to a more positive endeavour.
Some might also say what if your house got damaged or burnt down. I would say if you where like me and only bought the property for its potential land value increase (because really that is what property investing is fundamentally about) then the above scenarios although unpleasant and unwanted would not hold the dire horrors that some with a more superficial view might own.
Simon
Hi Folks
The only reason I have any kind of home insurance is because it is usually a criteria to be met by lenders. It is just a cost to doing business so I take measures to reduce that cost to a minimum. I know a lot of folk would disagree with my strategy and that is OK but I think I just had to put forward my 2 cents worth for those brave folk that regard fear based enterprises counter productive and restrictive to positive action. I would be then able to apply that money to a more positive endeavour.
Some might also say what if your house got damaged or burnt down. I would say if you where like me and only bought the property for its potential land value increase (because really that is what property investing is fundamentally about) then the above scenarios although unpleasant and unwanted would not hold the dire horrors that some with a more superficial view might own.
Simon
These days the real threat is not only fire and theft, but what happens if the tenant slips on the mat and seriously injures themselves in your property. Could lead to financial ruin if you don't have landlord insurance which will cover you for public liability.
To not cover a massive investment like IP with insurance is a huge risk.
We ALWAYS take out landlords insurance. Last year we bought a 5-bed house (IP), with a tenant having signed a 12 month lease. The day the new tenant was due to move in, the worst cyclone in 100 years hit. CGU paid us out for the property, and also 12 month's rent. In the end we decided not to repair the place. CGU were wonderful.
Purch price = $220K
Insurance payout = $253K (includes 12 months rent)
Sold for = $172K (in its damaged state)
Not a bad profit over a 7 month period from buy to sell, even if we do have to pay CGT...we are still miles ahead.
Purch price = $220K
Insurance payout = $253K (includes 12 months rent)
Sold for = $172K (in its damaged state)
Not a bad profit over a 7 month period from buy to sell, even if we do have to pay CGT...we are still miles ahead.
I might get shot down in flames here, but if someone slips on the stairs, landlords insurance is not what you want. This scenario should be covered by your buildings insurance. That is how I read things.
Happy to stand corrected, by on my buildings insurance policy, there is something like $10M cover for this.
Wylie
Happy to stand corrected, by on my buildings insurance policy, there is something like $10M cover for this.
Wylie
We ALWAYS take out landlords insurance. Last year we bought a 5-bed house (IP), with a tenant having signed a 12 month lease. The day the new tenant was due to move in, the worst cyclone in 100 years hit. CGU paid us out for the property, and also 12 month's rent. In the end we decided not to repair the place. CGU were wonderful.
Purch price = $220K
Insurance payout = $253K (includes 12 months rent)
Sold for = $172K (in its damaged state)
Not a bad profit over a 7 month period from buy to sell, even if we do have to pay CGT...we are still miles ahead.
I could be wrong but I think that that is covered by normal insurance (including the rent). that is why lenders insist on insurance in the firstplace.
Having said that, I still reckon you came out of it alright.
regards
Simon
I could be wrong but I think that that is covered by normal insurance (including the rent). that is why lenders insist on insurance in the firstplace.
Having said that, I still reckon you came out of it alright.
regards
Simon
Yes the building was covered by the building ins, but the landlords ins gave us an additional $12,480.00 for the lost rent. Happy with that!
And that is why lenders insist on adequate insurance policiies. What I was getting at is more the fundamental property selection criteria based on buying lower risk property based on land content value rather than the pretty thing that sits on that land. After all you are not insuring the land but the inprovements to that land.
The risk of a tenant slipping on a mat and suing me for it would only be a risk if I were made aware of that risk by the tenant. As was the case you are probably refering to.
It was posted a while back but cannot find the link to it.The bottom line is if you think you need insurance then YOU DO.
Simon
Strata Properties
Is insurance in a strata titled property covered by Body Corporate?
I think only if there is a structural or building damage, affirmative.
Not 'wilful damage', for instance if a tradesperson gets knocked over in the property while fixing the kitchen sink.
Lizard King
Is insurance in a strata titled property covered by Body Corporate?
I think only if there is a structural or building damage, affirmative.
Not 'wilful damage', for instance if a tradesperson gets knocked over in the property while fixing the kitchen sink.
Lizard King
Body corp only covers the outside of the building. Anything that happens inside the building, including legal liability, is NOT covered by body corp. Wilful or negligent damage by tenants, loss of rent, contents, are definitely NOT covered by body corp. That's why for a strata unit landlords insurance is enough. For a house you buy landlords insurance AND a separate building insurance policy.
Alex
hi CGW I use CGU through a broker. Was very greateful we had it just over a year ago when a newly renovated property was burnt down by the tenant (He was drunk and angry) This would not have been covered by a normal policy as it was the occupant who purposly set the fire. (Malicious damage) Over $120,000 damage paid by CGU including loss of rent for the four months it took to repair.
I understand Simonjulie's argument however although the land may be what goes up in value the building on the land pays the mortgage and allows the property to be leveraged.
Silas
I understand Simonjulie's argument however although the land may be what goes up in value the building on the land pays the mortgage and allows the property to be leveraged.
Silas
Hi Jingo.
As it appears that you have made numerous claims over the years, has this increased your annual premiums?
Regards
Marty
Hi Marty,
No, it hasn't increased our annual premiums. We have found that CGU has slightly higher premiums than other insurers, but they rarely question a claim and always pay promptly.
Regards
Unlike most of you folk we self manage a major part of our property portfolio.
We do this because we decided that it would teach us an important aspect of the game. Because we do self manage we are much closer to our tenants in more ways than a manager would normally be. We personally screen our own tenant applications and therefore have a pretty good understanding of the people and their requirements for the property(experience gained in this area is indeed valuable). I have planned my structure and stratergies regarding insurance to suit us and our needs. I had 8 properties exposed to the 2002 bushfires in Weston Creek(ACT)when other houses in the area were burning I had phone calls from some of my tenants asking what they should do regarding the houses. We said get out and save your stuff. Most of them stayed on and protected my property(I really appreciated that). What a great insurance policy.
A positive personal relationship with my tenants is one of the best insurance policies I know.I know that is not for everyone but it is part of our strategy to create a wonderfull lifestyle through investing in property.
Like I said before;
"If you think you need insurance, then you do".
Simon
