How much is your insurance excess on your IP

Hi there,

Just settled on our new home today and have just organised the insurance. We ended up going with NRMA as all our other policies are with them.

My question is, what roughly would be a good amount to settle for as your excess?

I went with $300 as that's what was the automatic entry, but figure I won't be making too many claims, so it might be worthwhile pushing it higher to save a little each month...

Would be interested to know other people's thoughts on this.

Thanks,

Andrew

 

I got a bundle of them in today - there's a $5k excess for flood claims but CGU is throwing in the cover for nothing.

 

Thanks Wylie. That does make sense. I will see if I can't up mine a little. Cheers.

 

Around $500 excess from memory, you can alter this amount when getting quotes online.

 

I have a 250 excess. Could have changed it to 500 and it would have been cheaper by $2 a fortnight..pass.

 

Just found out ours is $300 with CHU which is much lower than I had anticipated.
Need to make a claim for a shattered toughened glass panel from a balcony, cost $1,000.
Same thing happened just over a year ago on another property which cost $1,500.
We just paid it at the time as didn't know the excess would be so low, but broker says we can try and claim that one too.

A low excess is good when having multiple properties on one policy in our case, as there will be a higher chance of a claim.

 

You need to make sure you understand what excesses you will be paying even if you nominate $X as the basic excess. We were recently sent some correspondence regarding, coincidentally, an NRMA policy. I will repeat it below to make the point.

EXCESSES
The following excesses apply to your policy:
• a $300 basic excess for each claim
• when you claim for Rent Default we will deduct from your claim 4 times the weekly rental amount and a rent default excess of $300
• when you claim for Vandalism or a Malicious or Intentional act by a Tenant or their guest, we will deduct from your claim 4 times the weekly rental amount and the $300 basic excess
• when you claim for Theft or Attempted Theft by a Tenant or their guest, we will deduct from your claim 4 times the weekly rental amount and the $300 basic excess

This means, that although they have selected a $300 basic excess, the actual excess is massively higher. They are deducting 4 times the weekly rent PLUS the basic excess of $300. This includes loss of rent claims.

There are numerous policies that have NIL excess on loss of rent claims, and certainly excesses on damage claims nothing like these.

This person had gone with NRMA because they had other policies with them, yet despite the 25% no claim bonus and the 20% loyalty discount, they were paying a premium of $480 compared to our RentCoverUltra of $295 (it was an apartment).

So just that word of warning, check ALL the potential deductions, not just what is called the excess, because this one blew me away, and NRMA aren't the only culprits.

 

Holy ****!

 

This is why I tell my clients to read into the fine print. It maybe cheaper in the short term but in long term if the tenant loses his job etc and can no longer afford to pay the rent they are going to be out of pocket substantially if they have not looked into their policy correctly.

 

In addition to the above comments with respect to likelihood of claiming...

You need to look at the relationship between the premium and the excess. Ask them for the options and the answer becomes pretty quickly clear.

Quick hint... Don't assume that their pricing strategy for large excess always reduces the premium proportionally but who knows... It might

E.g. I lean towards high excess as I am unlikely to make small claims (based on 15 years of data - past performance not indicator of future blah blah) but lifting the excess beyond a certain point doesn't really reduce the premium significantly.

 

There is a bunch of them not worth using, especially to cover loss of rent...

PS ..... have 600 excess on building policies