Landlord Insurance – Expensive and Never Used? Ideas

It's a tax writeoff against the rental income anyway…

Wait till a tenant does a malicious damage job on your property and pays no rent while they are doing it.  It is VERY easy to do $40k of damage.  It is equally as easy to do $60k of damage.  Perhaps you need to ask yourself how you would recover from such an event if you were not covered by insurance.

Shop around.  Ask an insurance broker to shop around also.

Insurance is going up by the way.  A lot.

I had someone do $40k of damage.  The carpet was trashed (seemingly the tenant walked around inside with buckets of bleach and pink stuff that belongs in a garage and spilled it on the carpet), punch holes in the wall resulting in the need for the electricals to be checked, plaster replaced and the wall repainted, furniture trashed and stolen (it was furnished), portions of the kitchen damaged (why could they not ruin the whole kitchen for heaven's sake, then insurance would pay for a new kitchen), wrecked some of the powerpoints – again requiring electrician – damaged some curtains, bashed some of the floor and wall tiles resulting in having to redo the entire bathroom due to not being able to find a matching tile to patch it….

They smashed the glass of a sliding door but replaced it themselves with non-safety glass…

Just imagine if a tenant damages the roof.  The colorbond steel for instance.  That's $15k right there, minimum, surely.  Don't think they won't.  I have seen weird objects on the roof that a tenant put up there for some strange witchcraft behaviour.

I've heard of people dismantling an entire car with all its oil and grease….. in a loungeroom.  On the carpet.

You get the idea

My folks had a similar situation several years back.

The tenants didn't pay rent for a few months, then did a midnight flit. After we eventually got up there to check it out, there was several thousand dollars worth of damage done.

The bloke used to run stock cars, and drained the sump oil directly onto the garage floor… it was all pooled up in a corner somewhere. He also used to work on bits of the engine on the lounge room carpet (where the tv was) without drop sheets. On the way out, they smashed holes in every door and lots of walls, ripped fans from the ceiling, smashed almost every third tile in the bathroom, slashed every flyscreen, and stole every lightbulb from the house… including the one from the oven.

That's just the stuff I remember… pretty sure there was more though.

Oh yeah, and the RE agent gave them their bond back 2 weeks before we even knew they were gone.

Worst part was, my folks had always had insurance, but my grandfather (who used to own several unit blocks he built through his business) told them "they will never do enough damage to make insurance worth while". So on that advice they canned it a year or two before all this happened. Ooops.

It took years of rent to recoup the expense.

Insurance on anything you very rarely use but can you afford not to have it?

If you own houses your building insurance will cover a certain amount (like public liability).

But if you own units the public liability only covers common areas.

So can you risk a tenant getting injured (or dying) or a workman getting injured? got a cool $10 million sitting around?

So if you have great tenants in a house then sure you can not insure and run the risk. But without public liability insurance I couldn't sleep at night.

Sorry to go off subject….but can you give me some pointers on how youdid this?…..

Freckle's comment is very wise.  Never underestimate the value of your sleep at night money.  If by making a certain decision, will you cause yourself such stress in the worry of what might, or does happen as a result that you will be unable to sleep?

Yeah tenants lifestyle of smoking prohibited substances and spilling the black, disgusting water all over the carpet!

I'm having to go through all our properties insurance this coming week as the premiums in the last couple months have absolutely gone through the roof. Love to hear some suggestions of cheap but decent insurers. 

Ta

D

Definitely keep it. 500 per property isn't that much, I am paying 2500 a year with Suncorp, granted it was flooded but I wouldn't give it up for the world. I have used landlord insurance in the past, and try to get every cent that is owed. They are like banks in it for the money just like us as investors its a business, push them for every cent if something ever goes wrong. They will continue to pay your rent until a new tennant is found, so there is no stress and you can take your time.

Your mad if you get rid of it. 

Hi Guys,

Yeah landlord insurance is a cost that you just have to bare.

And if you are really unlucky you don't ever get to lodge an insurance claim. DOH

Now we must remember that insurance is tax deductible which is one plus.

One big claim on one property and you get to recoup all of your previous premiums, plus some.

Good luck if you can obtain some type of group discount.

I have had some luck with rolling all car, home and investment property portfolios with one insurer.

My parents and brother came on board so as to use the group discount.

It takes a lot of effort but if you get to shave a few points off of the policy…..every dollar counts.

Regards 

Some companies give you a multi policy discount. Suncorp do but if you pay by the month they charge you 15% so it cancels out the multi policy discount.

You can also try negotiating. My PM negotiated with Suncorp and they dropped her 2013 policy back to 2012 premium rates. I tried to do the same and they laughed. She is very sweet through, and has great people skills. Not that I do but she might have used the fact she is a PM as leverage.

Another thing to consider is like splitting up your portfolio with Banks, it can be a good idea to do a similar thing with your insurance. If you make to many claims your current insurer can choose not to reinsure then when you go to a new insurance company and you answer their questions they too make think it is too much risk to insure you. ie you get stuck, just like having your whole portfolio with the one banc.