All Topics / General Property / Insurance requirements for landlords

Viewing 17 posts - 1 through 17 (of 17 total)
  • Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    So have a question for you more experienced investors……..

    If you own an IP in a strata apartment building and your tenant floods the apartment and causes damage to other apartments (or starts a fire and causes the fire to spread to other apartments…….eg insert your favourite disaster in here)…..are you responsible in any way as a landlord…..?

    Or would this be covered by the strata insurance?

    I guess the question I’m asking is apart from strata insurance is there any obligation for an IP owner to have additional insurance?

    If the tenant damages your kitchen (eg with fire) aren’t they responsible for the damages….likewise with the damaging the next door neighbours floorboards through flooding.

    I’m trying to work out if we are “over insuring” for our investment properties having 1/ Strata insurance 2/ Landlord Insurance 3/ the tenants having household insurance.

    Any links your can recommend?

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    Yes you are liable for insuring your property.

    NO- It is NOT covered by Strata. Strata insurance is for building only. You need to insure everything inside the unit. If you or your tenant cause damage you are liable.

    You are also liable if your tenant or a visitor injures themselves in your unit. The main reason I get landlord insurance is for the public liability. You risk losing EVERRYTHING if someone is injured or dies on your property.

    Strata insurance only covers public liability on common ground (not IN your unit).

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    Yes I understand that strata is not responsible for fixtures and fittings within the apartment envelope, eg if my tenant burns our IP kitchen then it is up to the landlord to replace the kitchen (lol though why the tenant doesn’t need to insure this I’ll never know) but if a kitchen/floorboards/fixtures are crappy then can a landlord decide to self insure?
    Eg the $700 a year I’m saving per year on insurance is an extra months mortgage payment.

    Its not like its insuring a house where if the tenants burn down the entire house then you are up for a truck load of problems, in this instance all we are talking about is a $10-15k kitchen and $5k on floorboards and maybe $5k on paint/fittings etc.

    Basically what you are doing when paying the insurance company is saying that once every 30 years…..you are going to damage ever single thing in your apartment and I’m not sure the odds of a complete write off are that high.

    Its nice to tick the box and know you are covered (or at least you think you are covered until you make a claim) but when you start to own a number of properties……these annual fees start to add up.

    What else is a landlord responsible for covering the insurance on?

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    What if (like your example) your tenant starts a fire and the whole complex burns down? If it’s intentional strata insurance will come after you. It’s not just your property. If your unit causes damage to other people units YOU are liable. eg the pipes (inside your unit) burst and destroy the unit below’s furniture). You are liable.

    And the MAIN thing it covers (which I mentioned) is public liability (over $1M). If anyone gets injured or dies you lose everything. Worth the risk to save $350 a year? I don’t. I like to sleep at night. It’s only $1 a day. There are plenty of better ways to save $7 a week I think.

    I have multiple properties and yes it adds up, but then again so does your rent and profit. I only have landlord on strata places. On others I only have building (as that covers public liability). Still only a few grand a year.

    • This reply was modified 6 years, 3 months ago by Profile photo of Catalyst Catalyst.
    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    @catalyst….if someone injures themselves in one of my IP apartmetns…..how is it my fault? eg just because I own it doesn’t make it my liability.

    This is my point exactly I think people are “over insuring” and if the sh1t did hit the fan would NRMA insurance really say oh yeh we’ll pay the person who tripped down the stairs drunk $1m……no way they would say not our prob bob…..

    Thoughts?

    Profile photo of NathanNathan
    Participant
    @hawaii83
    Join Date: 2014
    Post Count: 3

    I was of the understanding that if you own an investment property in a strata complex then you are covered by public liability??

    Profile photo of NathanNathan
    Participant
    @hawaii83
    Join Date: 2014
    Post Count: 3

    It’s frustrating ringing insurance companies to find out what is and isn’t covered in a strata apartment because i feel the person on the other end doesn’t really know when you start asking more complex questions. Such as if other apartments fixtures and fittings are covered in the event of a fire by your tenant.

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    @Catalyst….if someone injures themselves in one of my IP apartmetns…..how is it my fault? eg just because I own it doesn’t make it my liability.

    This is my point exactly I think people are “over insuring” and if the sh1t did hit the fan would NRMA insurance really say oh yeh we’ll pay the person who tripped down the stairs drunk $1m……no way they would say not our prob bob…..

    Thoughts?

    Wrong! Wrong! Wrong!

    This is EXACTLY why you need insurance. You don’t even know what you are liable for. Look it up. That’s why my insurance covers me for $20,000,000 Legal Liability. Even if the payout WAS refused, how much extra cash do you have to fight it in court?

    If someone injures themselves on YOUR property YOU ARE liable. No one said it’s your fault but that’s the law.

    Nathan that is a common misconception. In fact strata insurance is only liable for common areas (not your property).

    • This reply was modified 6 years, 3 months ago by Profile photo of Catalyst Catalyst.
    • This reply was modified 6 years, 3 months ago by Profile photo of Catalyst Catalyst.
    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    Catalyst….how is it my fault and how am I responsible as the property owner.

    Please understand I’m not talking about “the building falling on them while sitting on a sofa for a coffee” sure that would be my fault (or in an apartment the stratas fault).

    I’m talking about they are walking across the living room and tripped and hit their head…….as long as they didn’t trip on a rug (renters fault) or slip on a wet floor that the renter just washed (again renters fault)

    Now if they tripped on a loose floorboard AD I knew that the floorboard was a trip hazard then yes THAT would be my fault. Other than that how is liability the landlords issue.

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    OK You are right in the fact that the person suing you needs to prove fault.

    That does not stop people from trying, which can be very costly for you.

    There are many things which a home owner may not be aware of (but could be proved that they should have been aware of, and therefore liable).

    Example- Smoke alarms. Do you know your legal responsibilities regarding maintenance?

    If a tenants reports an issue -light switch faulty (later causing electrocution), tap leaking on floor (later causing person to slip), cracked window pane (later causing injury) etc etc. If you know about the problem and were deemed to not have fixed it in a reasonable time you ARE liable. What if you don’t get someone there quick enough? or you think, oh it’s only a little crack. I’ll leave it.

    I know these things are likely never to happen but really! to save a few hundred dollars a year? I don’t have landlord insurance on my houses because I have stable tenants and the money I save on multiple properties would be enough to cover if one did as runner. But I do have it on units and villas only because of the public liability. It allows me to sleep at night knowing I’m not going to lose everything if some go getter decides he can sue me for slipping over.

    The cost in the scheme of things in property investing to me is minimal and just part of the cost of my business. If a few hundred dollars makes or breaks a property deal, you are doing it wrong.

    I know of one person who had steps at the front of their property where the treads were not legal height. Unfortunately for the person, they knew this when they got as building report when buying but didn’t replace them).

    Up to you.

    Profile photo of NathanNathan
    Participant
    @hawaii83
    Join Date: 2014
    Post Count: 3

    I don’t understand why you would have public liability insurance for an apartment and not in your houses? If a tenant can trip an apartment they can also trip in a house. Also 20million public liability is a little over the top. My friend was recently hit by a car and it was the drivers fault. He broke his leg and can never run again and got $12k from insurance company

    Profile photo of CatalystCatalyst
    Participant
    @catalyst
    Join Date: 2008
    Post Count: 1,404

    No you missread my post. I didn’t say I don’t have public liability on the houses. I said I don’t have Landlord Insurance on the houses. Building insurance covers public liability on the houses. Whereas the strata building insurance only covers common areas (not inside my unit).

    The $20M is what one of the policies has. Who cares if it’s too much? What if someone dies in your property? Or is permanently disabled? That can be $M payout + legal costs. It’s a worst case scenario.

    • This reply was modified 6 years, 3 months ago by Profile photo of Catalyst Catalyst.
    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    @catalyst so for your strata apartments how much are you paying per year for your landlord insurance and who is it through.

    Is anyone on the list getting a “bulk” discount because you have 10+ properties (and I don’t men the usual….we’ll give you 10% off because you bundle everything through the one insurer I mean a real discount……).

    Maybe an easy way of doing this is can people post below how much you are paying for landlord insurance and who it is with into the post below.

    Lets make the PI.com website valuable by working with each other to find the best insurance possible for LL so we can keep more money in our pockets rather than expenses…….

    Profile photo of MilkTruckMilkTruck
    Participant
    @milktruck
    Join Date: 2010
    Post Count: 15
    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    ridiculous….. Australia is becoming just like the USA with ambulance chasing lawyers at every turn.

    sure its easy for landlords to joke now but you only need a few 800k payouts before no one wants landlord insurance and everything goes to hell and it becomes a multi-thousand dollar a year expense to insure.

    Profile photo of DeanCollinsDeanCollins
    Participant
    @deancollins
    Join Date: 2015
    Post Count: 376

    you can bet if I put my own hand through an existing window in my house that wasn’t up to code but existing that I wouldn’t get $800k compo for it.

    Profile photo of Philip-GreenPhilip-Green
    Participant
    @philip-green
    Join Date: 2020
    Post Count: 0

    So have a question for you more experienced investors…….. If you own an IP in a strata apartment building and your tenant floods the apartment and causes damage to other apartments (or starts a fire and causes the fire to spread to other apartments…….eg insert your favourite disaster in here)…..are you responsible in any way as a landlord…..? Or would this be covered by the strata insurance? I guess the question I’m asking is apart from strata insurance is there any obligation for an IP owner to have additional insurance? If the tenant damages your kitchen (eg with fire) aren’t they responsible for the damages….likewise with the damaging the next door neighbours floorboards through flooding. I’m trying to work out if we are “over insuring” for our investment properties having 1/ Strata insurance 2/ Landlord Insurance 3/ the tenants having household insurance. Any links your can recommend?

    I don’t think you are over-insuring here. Your landlord’s insurance will also cover additional stuff not covered in the Strata insurance for example loss of rent damage to the property the list goes on. You may be best to speak with a broker or adviser I use https://fundamentalinsurancebrokers.com.au/landlord-insurance/ for my landlord insurance on multiple properties that also have starta insurance as a standard

Viewing 17 posts - 1 through 17 (of 17 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.