Maximise landlord insurance payout - how?

[wylie]

I have a friend who has a pretty hopeless agent (so it seems). Her tenants are making lots of noise well into the early hours of the morning. The agent has handed it over to the manager of the PM company who is trying to get them out.

My friend took out landlord insurance on my advice (and she is very thankful). I don't know which company she used.

However, I'm wanting to ensure she knows the best way of doing things should these tenants stop paying rent. I'm not sure the agent will get it right. So far they have not been very impressive. She will change agents once this is sorted out.

What is the rule (is there such a thing) about not allowing the agent to take any rent owing from the bond? Does the insurer expect the bond to cover any cleaning and/or damage?

Should I advise her to forbid the agent to dip into the bond for any rent left owing?

I know she can call her insurer, but just want to give her some hints as to what to watch out for. So far there is no arrears, but that could change if things go downhill.

 

[thatbum]

However, I'm wanting to ensure she knows the best way of doing things should these tenants stop paying rent. I'm not sure the agent will get it right. So far they have not been very impressive. She will change agents once this is sorted out.

Umm, evict them asap?

I'm not sure what tricks you are expecting but there aren't really any. The bond stuff doesn't really matter because the bond has to be used before a claim anyway.

 

[wylie]

Umm, evict them asap?

I'm not sure what tricks you are expecting but there aren't really any. The bond stuff doesn't really matter because the bond has to be used before a claim anyway.

I'm not expecting any tricks. I'm aware her agent seems hopeless, and if the advice is to ensure the agent will not take any rent from the bond, that is what I want to tell my friend.

If the insurer says "sorry love, your agent stuffed your claim for four weeks rent we could have paid you because they used up the bond that you should have used for cleaning", then I'm trying to help my friend learn quickly what she needs to know.

She has no idea, I've never faced this, but I've read here on SS there are things that should NOT come from the bond. I just don't know what.

She needs to be informed but not alarmed. Her agent doesn't seem to know her ar$e from her elbow.

 

[thatbum]

Insurance is like the safety net right at the end of the whole process. Its not a very good one by the way, even at the best of times.

Her focus should be about being on the ball with the proper eviction process. If she doesn't know much about that, then learning that first would be a good thing to focus on.

There is way too much reliance on insurance by landlords and not enough about learning property management imo.

 

[wylie]

Absolutely agree with that comment. I'm going to tell her to push her PM and if they fell behind in rent, get her to push them to issue correct notices the minute they can be sent.

Fingers crossed they leave without damaging the place. It was just renovated.

And typically, the neighbours are calling her rather than call the police over the noise issues. The neighbours know her well as she lives nearby. I've told her to ask them to call the police if there are noise issues. That way, there is some record of problems. We once had similar issues and the same issue arose.

Fingers crossed they move out without issue.

 

[Xenia IM]

There is a formula

There is a "language" to use for insurance companies if you know what I mean. If you say the wrong thing the claim can be void.

Ie in our office, we once had to get new keys made because a tenant left and did not return keys to our office - not claimable.
we issued an invoice saying this is the cost to replace the keys "stolen" by the tenant. - fully claimable as it falls under malicious damage.

if she is with a specialist property investment insurer it will be easier to get the claim across. If she is with one of the banks, alianz or sgic or something similar, claims are minimal, watch language and expect excess to be high.

Most insurance companies understand "arrears" so claim that on insurance.
If there are outstanding water invoices - they are not claimable, use up the bond with non claimable expenses first - leave arrears out of the bond.

If you can show that bond is absorbed by non claimable expenses, cleaning costs, gardening costs etc then they should honour an arrears claim.

The specialists insurers will allow claims for cleaning and gardening too.

If they agent has no experience in putting though claims to get maximum benefit then she should instruct them to make no claims against the bond or on insurance and she should do it herself using above strategy.
good luck.

 

[DEC]

The specialists insurers will allow claims for cleaning

Are you sure about this? I have never had a claim for cleaning paid, it always gets fobbed off as poor housekeeping therefore not malicious damage.

 

[wylie]

Thanks Xenia. This is the sort of information I was seeking. I gave her the names of the specialist policies often talked about here but don't know which she chose. I will keep in close contact to help her as the PM seemed clueless from the start. My friend felt obliged to "give her a chance" when I suggested changing agents even before a tenant was found.

PS. I'm guessing you are the same Xenia who used to post? If so, it is good to have you back .

 

[Xenia IM]

Thanks Wylie
Yes same one as old business partner kept my SS account and email
Needed to start new one.

Dec - 100% sure we get cleaning costs through all the time!
We use PI plus and Terri Scheer.
Others won't allow it.

 

[Truly Exotic]

check, what is covered by your policy, some insurers dont do utilities etc. so I always instruct the PM to take bond towards the cleaning and utilities etc, and hope to hell, it doesnt exceed the bond,

and I really hate the clause that pretty much all insurers have of no cleaning,

leaving the place dirty or like a rubbish dump, is a form of vandalism, it cannot be any clearer in my eyes, but yet to this day, you cant claim it for the most part

 

[marg4000]

Thanks Wylie
Yes same one as old business partner kept my SS account and email
Needed to start new one.

Dec - 100% sure we get cleaning costs through all the time!
We use PI plus and Terri Scheer.
Others won't allow it.

Terri scheer did not allow any cleaning or rubbish removal of a claim we had. This was in Qld, other states nay be different.
Marg

 

[Xenia IM]

Hmmm

we always get properties professionally cleaned and rent ready after evicting a tenant.
End of lease cleans are extensive and I want properties looking like new (or as best as it can be for age of property) as it sets precedence for the next tenant.
So far no landlord has had to wear that cost.

Costs are absorbed by bond first then insurance pays for anything out of the bond.
It's probably in the way the claim is put through.
I have ONE single person in my office trained for insurance claims - no one else is allowed to do them because there is a risk of denial.

This one person does nothing else except deals with insurance and compliance issues - smoke alarms etc...

Insurance are a funny breed of animal.