Does anyone ever not get LL insurance?

My insurance renewal has come up and I am tempted to get building insurance, not LL insurance because my tenants have been there for several years without incident and have a two year lease. Does anyone just insure their property with building insurance or is there a reason why you shouldn't do that as a landlord that I don't know about?

I know some insurers won't let you just have building insurance if you are a landlord.

Another thing I'm not sure about is which insurers insure the fixtures and fittings in building insurance. The AAMI guy told me the other day that I had to have contents insurance for things like carpet and blinds but I always thought that was included.

 

I've never had LL insurance, mostly because when I enquired about it, it was not available to me because I was self-managing (IIRC).

I've definitely lost out at different points on certain tenants due to damage etc, but those instances have only served to increase my knowledge/understanding of what to look out for / what to do.

I will say - I am in no way an insurance expert and probably should review the current offerings for my situation.

 

Even with extreme vigilance you can still stuff up. Consider it as either a steep learning curve or self-insuring.

 

I know some people don't have it but we were sued by a professional tenant a few years ago. The contractor who carried out some work for us at the property was primarily found to be at fault BUT our insurance company and the PM also settled and had to make a contribution.
I can't say too much on a public forum but it still cost us a few thousand in obtaining independent legal advice.
The tenant had previously been there for 5 years without any problems.
I wouldn't be without it.

 

I don't have it for most of my IPs. I'm generally not a big insurance fan if you can afford to absorb the losses. Obviously the premiums and excesses are calculated in the insurer's favour.

Only notable exception for me is health insurance.

 

In some cases (eg Strata), LL insurance is the mechanism for you to get third party liability insurance. You would be brave to not have that.

 

Landlord insurance for me costs the same as PPOR for my IP.. I thought it was odd... I would have assumed LL insurance would have been more expensive! I have certainly contemplated passing on insurance though.. But not seriously.

 

At a certain number of properties there may be a golden number/value where it can make sense to self insure. However it doesn't take much for a tenant to wreck that self insurance policy.

At around $700 pa, if you have 10 properties and you assume that a tenant won't do $7000 worth of damage then go for it. It doesn't take much to reach $7000k in repair bills, lost rent, court time/appearances by your PM etc.

These days I have it on my new properties but not my old properties. For the old properties I'm on the 'tenants please demolish' plan

 

I didn't think this was the case with LL specific insurance. @brettc may have some feedback on this.

 

What about protection from legal liability though?

When you say demolish you mean please 'burn it down' or just thrash it? I don't see how a thrashed up place is good on the wallet.

 

What do you mean by legal liability? I have normal insurance on those places just not land lord insurance.

It's a mitigated risk I take. I'm not advocating it's right or wrong but so far through good tenant selection any damage has been small and accidental and covered by bond. I have one tenant being Evicted and I am paying my PM for court attendance which is a small amount.

 

I don't have LL insurance, I don't see much benefit in it. I think you are better off putting your money in the share market yourself and having your own insurance fund to draw on if needed, which can also be used for funding more properties you could than draw against also if needed. Any insurance claims have been covered by general insurance including liability.

 

I have LL insurance on my units as I don't feel comfortable not having public liability insurance. With strata the public liability only covers common areas. On the houses it's covered in the building insurance.

 

I have LL on my my IPs. The fees wont make you or break you plus it is tax deductible. It is the same as a car insurance, I pay them but hopefully I do not use them. BTW, NRMA is my personal choice. I found out smaller insurance companies have difficulty paying out.

 

It only takes only 1 professional tenant to set you back for years.

 

If you're only referring to the LL portion then this is more like 250 a year, which affects your aforementioned sums. My building and LL combined would be 700 pm on some.

The LL portion comes with 10 mil liability; fairly sure the building portion does not.