Landlord insurance – READ your policy!
At a recent team meeting for the Beyond Property Management team, we discussed some recent client experiences with claiming on landlord insurance.
I make no apology for wearing my heart on my sleeve when it comes to caring for the well-being of our clients. But I have had yet another incident recently that upsets me, and is a problem I have seen a few times too many recently. So today I provide information related to one area I often see that costs clients money – when they thought their Landlord Insurance would cover them in a time of need… and they are time and time again let down and left out of pocket due to sub-standard landlord insurance policies.
I won’t make apology for caring, but I will give a disclaimer – we are not licensed insurance brokers. Therefore we are not qualified or insured to comment on insurance. So I delicately make the below general comments on my observations from recent claims that clients have had to make.
My heartfelt plea to property investors is this –
PLEASE DO NOT CHOOSE LANDLORD INSURANCE BASED ON POLICY PRICE. THE QUALITY OF POLICIES VARIES GREATLY.
PLEASE READ THE POLICY DOCUMENT AND UNDERSTAND WHAT YOU ARE COVERED FOR AND MORE IMPORTANTLY – WHAT YOU ARE NOT COVERED FOR
PLEASE UNDERSTAND THAT BODY CORPORATE INSURANCE DOES NOT COVER PAST THE FRONT DOOR – THIS ONLY COVERS COMMON AREAS OF THE BUILDING.
The particular policy wording that I urge you to check is whether all ‘damage’ to a property covered, or only ‘malicious damage’. I have even seen insurance refused for holes in walls that were clearly punched or kicked – with the insurer claiming there was no evidence it was malicious.
I have also seen a so-called landlord policy that did not cover any loss of rent for any circumstances!
Through a quality insurance provider I have seen successful claims for ‘accidental damage’, while through other policies I have seen poor experiences. So please do not interpret this email to mean that landlord insurance is bad – I believe landlord insurance is essential – but that you need to be very careful with your selection of provider.
QCAT is a very ineffective system for recovering tenant debts and is absolutely no replacement for quality landlord insurance.
So today I urge property investors (and only because we care) to please take out landlord insurance. Please read the policy, and make a decision on value not price.
We hope this information helps you reflect, and if this post saves just one investor from a nasty insurance headache, then it was worth the time for me to type it… and hopefully for you to read it!