RESOURCES > Property Insurance
Property insurance provides protection against most risks to property, such as fire, theft and some weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance or boiler insurance.
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St George Underwriting Agency Our LANDLORD PROTECTION cover is designed to minimise the financial effect on your investment return which arises from an unexpected default or deliberate damage by your tenant. What's the point of taking out a policy that has high excesses? Our cover has a standard NIL excess on tenant default and damage and only $50 excess on the normal Building and Contents cover. Our HOLIDAY HOME cover is designed for weekenders, resort units and the like, whether rented out or not. Specially-tailored, we have no unoccupancy clause and cover deliberate damage by a tenant and subsequent loss of rent.
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Property Investors Insurance
TENANT DAMAGE - WHAT YOU THINK YOU SEE IS NOT NECESSARILY WHAT YOU GET
The idea of insurance is to transfer to someone else the risk you can’t afford to carry yourself. This becomes quite critical if you are highly-geared in an investment property and cannot afford unexpected expenses arising from a bad tenancy.
So what can you expect from a landlord’s protection insurance? Firstly, have a good look at what you are getting. Damage in some policies means malicious damage (there must be malice in the act by the tenant). In others, its deliberate acts (wider than malicious) and some give accidental damage (wider still).
But having a claim that qualifies and getting it all paid are not the same things at all. Take accidental damage for example. Every landlord’s policy issued in Australia that gives accidental damage has a substantial excess (about $350 per event or more). The problem is that each item of damage is, if it’s an accident, a separate event. So your excess is going to be (say) $350 for each mark or chip. So, multiple marks on a wall or carpet may attract multiple excesses. That can quickly wipe out the cost of painting a wall or replacing a carpet. You can end up with a “Claytons” cover.
Other policies, which give deliberate damage for example, are frequently excess-free. Some items of damage will qualify as both accidental and deliberate under different policies.
So when you are looking at the options, look at the mix of cover and excess. That way, you will know what to expect from your insurer and what you will have to pay for yourself. Don’t get a rude shock!
LIABILITY FOR STRATA UNIT OWNERS
Another type of insurance cover that is frequently overlooked is the liability exposure of the owner of a strata unit.
A body corporate will insure the strata building and common areas against property damage and legal liability. As an owner of a unit in the strata complex, you will be protected against law suits or liability claims against the strata company.
However, the strata company will only protect the interests of its members insofar as they form part of the body corporate. They will not protect owners being sued individually.
A case a few years ago involved a unit owner who laid paving on “his” patio which was part of the common area. A tenant tripped on the paving and sued the body corporate and the owner separately.
The body corporate insurer defended the body corporate and left the unit owner to fend for himself. Fortunately, the owner had a Landlord Protection policy covering the contents of the unit which had a liability insurance included, so he was OK.
It is apparent that a lot of owners don’t consider the contents of the unit worth insuring and consequently don’t carry liability insurance.
Remember, it’s not just being negligent that you need to be concerned about. It’s also the cost of proving you weren’t!
(Not the Bank!)
