Building Insurance - excess

Discussion in 'Property Management' started by bunkai, 7th Jan, 2019.

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  1. bunkai

    bunkai Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    473
    Location:
    NSW
    Renewing my insurance for a house - rebuilding cost $700k for the sake of argument (though I think this is a little on the high side)....

    $500 excess = $1211 /yr
    $1000 = $1085
    $2000 = $975
    $5000 = $611

    I've had this property for 15 years and no claims - which could increase my risk of a claim ;) Someone can argue the probabilistic accuracy of this.

    Some rough math - for the $5000 excess to make sense I would need to not have more than one claim every 7 years. However, I have 15 years where I haven't pocketed the saving (probably irrelevant)...

    Interested in others thoughts / approaches....
     
  2. Fargo

    Fargo Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    546
    Location:
    Vic
    I only put a minimum of cover on, with the savings and a little more, I invest and have my own insurance fund, savings over 10 properties over 10 years compounding away with DRP and CG add up to a significant nest egg. With depreciation claimed on the building and increase in land value and a little positive cashflow, even with the lowest cover, in the event of loss I am not much if any out of pocket.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    13,371
    Location:
    Sydney or NSW or Australia
    If you're looking to save $600 pa on your premium, can you afford to pay the $5,000 excess?
     
    willair likes this.