Insurance advice needed

Discussion in 'Property Management' started by meni, 30th Jan, 2019.

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  1. meni

    meni Member

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    Hi all,

    I am a fairly new IP owner. Only 1 year in on my investment journey so far. I have both building and landlord insurance, but not contents. Should I also have contents insurance ? I assumed landlord insurance meant I didn’t need it, however I am unsure now. My properties are not furnished.

    I would like to know if most landlords take out contents insurance?

    Thanks
     
  2. ChrisDim

    ChrisDim Well-Known Member

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    As a landlord, you don't need content insurance @meni. Save your money. Your landlord insurance covers all your fixtures and fittings and liabilities in case something happens that you are responsible for that destroys your tenant's property. If the tenant wants, they can get some for their contents. I hope that helps.
     
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  3. Eric Wu

    Eric Wu Well-Known Member Business Member

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    I have building and Landlord insurances for all the standalone properties, haven't bought any content insurances.
     
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  4. Marg4000

    Marg4000 Well-Known Member

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    Have a close look at exactly what is covered under your building and landlord policies. Wade through the PDS.

    Things that may or may not be covered include kitchen and bathroom cabinets and fittings, carpets and floor coverings.

    Some building policies include an automatic, basic ($20K or so) contents cover to cover any ambiguity.

    If unsure, get confirmation from your insurance company, in writing.
    Marg
     
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  5. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    Whoa! This needs some scope as what hasn’t been clarified here is that there are different types of contents insurance.

    Firstly, the title of the thread needs addressing. No one can provide you with insurance advice unless they are qualified to do so and no one should provide you with insurance advice unless they have taken your full situation into account.

    Back to the topic. There are different types of contents insurance. I believe the one you are talking about is for personal belongings - TVs, furniture, etc. This isn’t required by landlords as they’re not living there.

    However what is important is taking out landlord contents insurance. Your cover is generally split into a few areas - contents, building, loss of rent, malicious damage and a few miscellaneous items. Landlord contents generally covers anything that is property of the landlord but not permanent affixed to the property - split air con, ceiling fans, blinds/curtains, dishwashers, carpets and any other number of items.

    Think of the worst case scenario. If your house burns down you will be covered for the building but if you don’t have landlord contents you might not have any of the above items paid out. Is that a risk you’re willing to accept?

    Fortunately most “landlord insurance” policies encompass the contents part but some you have to purchase separately. From a personal perspective I would never, ever risk not having that component of my LL policy.

    As always, read the PDS and get proper advice and clarification on a product before making a decision.

    - Andrew
     
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  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yes I'm with Andrew here.

    Contents owned by a tenant are UNINSURED unless they have personal insurance. Even a defect in the property that leads to loss (eg electrical fire) will NOT cover tenant property. eg Clothing, kitchen items, appliances, furniture etc as its an exclusion in policy terms. Many people believe that they can be a tenant and be uninsured because they can fall back on the LL policy. Wrong. I always suggest that people look around and ask what it may cost to replace every single thing they all own if the property was gutted by fire. It will run to a significant shopping trip !! If you cant afford to go out tonight and buy it then insurance is the solution. And not underinsuring !!

    LL insurance MAY include cover for F&F that are contained within the unit owned by the LL (NOT the tenant) and indemnify the LL as owner eg carpets, blinds, plant items such as an AC etc and the kitchen cabinets, bathroom fitout and more, maybe even things like HWS, dishwasher etc. May even extend to fusion cover. LL cover can also exclude contents and leave a exposed risk
     
  7. brettc

    brettc Well-Known Member

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    As has been suggested above, there is no simple answer to that question without knowing exactly the policies you have in place as every insurance policy varies.
     
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  8. meni

    meni Member

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    @brettc I have building insurance through NRMA, and EBM RentCover Ultra for landlord. Does the EBM RentCover Ultra cover the contents like fans, air-con etc?
     
  9. MyPropertyPro

    MyPropertyPro REBAA Buyer's Agents Sutherland Shire & Surrounds Business Member

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    You will have been provided with a PDS when you signed the policy. This should be your bible BEFORE agreeing to any policy. It’s concerning that you’re unsure about this after the fact. Too many people destroy their financial futures by not understanding what they are signing up for and realize all too late.

    Please take the time to read the PDS/contract/email/engagement agreement or any thing else you buy or sign during your investing journey.

    - Andrew
     
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  10. brettc

    brettc Well-Known Member

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    Can you let me know what State the property is in so I can make sure I give you the most accurate answer please. Also, the "etc." would be hard to respond to as it could go mean too many different things, some may be considered part of the building and others the contents.
     

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