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Building and Landlord Insurance

Discussion in 'General Property Chat' started by Mick Butterfield, 13th Apr, 2016.

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  1. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Just wondering how people ascertain what amount to insure the house for. The suggested amounts vary greatly and I am finding it hard to settle on a figure. My solicitor has recommended the sale price minus the unimproved capital value which in my case would be $230k - $175K = $55K which for my mind seems greatly under insured. Any advice is greatly appreciated.
     
  2. Greyghost

    Greyghost Well-Known Member

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    All valid points.
    Maybe work off a sqm build cost....

    Also keep in mind the bank may require you to have a minimum replacement value on the certificate of currently supplied to them..
     
  3. Hodor

    Hodor Well-Known Member

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    Can you replace the house for $55k?

    On one property the insurance company recommended an amount, on others I can't remember. One company had ranges ie. $200k-300k was the same price so I went for the higher figure.
     
  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    I usually choose for an amount that'd cover like for like replacement.

    Eg if its a 3 bed 1 bath single storey home and the worst case scenario happened (ie burnt down) I'd need insurance money to pay for site clearing and construction of a 3 bed 1 bath single storey home to be built.
     
  5. joel

    joel Well-Known Member

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    Mines covered for an amount where I wouldnt mind if it burnt down..
     
  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    Be careful what you write online :cool:
     
  7. dabbler

    dabbler Well-Known Member

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    You have to decide, if the place is a total write off, do you want to be able put a rentable residence back on the block ? or would it be doing you a favor as you intend to develop ?

    If you look at new estates, not hard to work out build costs, or just call one of the project places and price a simple place you find acceptable.

    It also will depend on where and how much demand for land.

    On some you can afford to have far less building insurance, and others need to be covered, I know plenty that had no insurance, but the empty land was worth a lot. Your lender may also dictate what you should have & you do not want to be left with a large mortgage with block that can't easily cover if your under insured (under really would seem to me to be similar to none).
     
  8. datto

    datto Well-Known Member

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    A new project home is about 180K add demolition 20K site costs 25K legals 10K basix 15K plus add 10 % buffer = 275K.

    Premium is only 850 pa includes land lord insurance.

    The Druitt is the cheap end of town.

    Not sure what happens to tenant as they are month to month. Maybe just give them a couple gran and tell them to find another place.
     
  9. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Thank you for that Greyghost
     
  10. Mick Butterfield

    Mick Butterfield Well-Known Member

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    No Chance re the $55K That's why it did not sit well with me. I can't see anything being built for less than $250K and that would be very basic. Thank you for your input.
     
  11. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Sounds very logical. Might try that.
     
  12. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Thanks heaps Dabbler.
     
  13. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Great info, thank you
     
  14. Mick Butterfield

    Mick Butterfield Well-Known Member

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    Hi Datto,

    Can I ask who you have the insurance through?

    Mick
     
  15. Roshy

    Roshy Member

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    Insurance companies have calculators online which estimates the replacement cost. For a 3br house it seems to be around 250-300k.