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is this insurance bill a killer? 4300!

Discussion in 'Property Management' started by myusernam, 22nd Jan, 2017.

  1. myusernam

    myusernam Member

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    townsville
    Ok so I am putting in an offer on a house in Townsville (expensive insurance) near a flood area (wont affect house but does affect premiums)
    cheapest landlords insurance that came back through a broker was $4300 :(
    rent approx $380 week
    house val $310000
    I figure thats $2k more per annum in insurance per year than normal in this area. Which is $40 a week off the yield calc. Still not to bad. House is well below market value compared to others in area. (motgagee in posession, needs some paint etc) potential for growth good.
    only have one other IP also in townsville and its insurance is also high so I dont know what is normal.. I suspect in Townsville we get the full pineapple. I think this may normalise over time.
    I'm a bit hesitatnt as I think this house is cheap but the market doesn't seem to think so. I dont think it can be the insurance though as I doubt everyone looking would bother to check?
     
  2. wylie

    wylie Moderator Staff Member

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    That is a big chunk out of the weekly rent. It would knock the deal on the head for me.
     
  3. dabbler

    dabbler Well-Known Member

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    Insurance gets dearer the further North you go past approx Bris it seems with most insurers.

    You may be able to lower it by taking more risk yourself.

    At the end of the day, if you know *you* can make money out of it & that it is worthwhile, then that is what counts.
     
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  4. HUGH72

    HUGH72 Well-Known Member

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    I would investigate possible premiums myself and consider increasing the excess to a level I could afford and make sure the amount insured for accurately represented removal and rebuild costs but no more.

    Which insurance companies did the broker provide quotes from? I know some companies don't insure properties in some areas.
    Commiserations but you don't get the full pineapple in Townsville, those further north do.
     
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  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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  6. Player

    Player Well-Known Member

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    @myusernam ring around yourself as @HUGH72 mentioned above.

    At the very least try the banks (insurance) and Suncorp, RACQ and NRMA.

    Ask your broker who the other quotes were from and to list their names. Hopefully they didn't just
    ring See Gee You and give you that figure.

    Anecdotally, I am finding in QLD or around the Gold Coast at least, insurance is more expensive in the storm season and of course if there have been a history of claims due to events, you end up footing the bill when you go to sign up.

    I changed our PPOR insurance provider last year and saved nearly 40 %. I got rid of my broker years ago after putting up with their comfort zone (non) activity for long enough. I had many policies through them and the savings made by spending an hour and a half on the phone ringing around was close to five grand.
     
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  7. hammer

    hammer Well-Known Member

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    A flood zone in Australia's north is only going to get worse as time goes on. All it will take is a cyclone or two and your premiums will go bananas no matter what deal you manage to score now.

    I would buy something else a little higher and dryer. Its not like you're lacking for choice in the 'ville at the moment....
     
  8. Yson

    Yson Well-Known Member

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    Just wondering how other investors go with this high costs of insurance??
     
  9. dabbler

    dabbler Well-Known Member

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    Before I exchange I always check insurance costs, and in anywhere that is even a hint of a flood close by, with multiple companies to make sure it is not going to be over the top.
     
  10. myusernam

    myusernam Member

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    before I rang the broker I tried CBA and then suncorp who were approx 9 and 8 K respectivley. (suncorp work out replacement value and said the swelling was 790k to replace - they wont let you do it any other way)
    Thats when I gave up and rang the broker. Broker even referred to the insurer and said it was on stumps but they wouldnt budge.
    If I go too high an excess seems risky with tenants. I dont know if the building insurance excess and the default on rent/ malicious damage can vary too much? If so i could raise the building excess and keep the default on rent etc low..
     
  11. dabbler

    dabbler Well-Known Member

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    Split the insurance, do building as one policy, LL as a separate

    Suncorp and some others won't split, but many will happily do it.
     
  12. HUGH72

    HUGH72 Well-Known Member

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    Forget Suncorp then and try QBE, Youi, Allianz and AAMI. A house purchase for $310,00 does not cost $790,000 to replace, even in northern Australia where building costs are much higher.

    Near a flood zone but not in one, I would want to be sure. Good luck.
     
  13. Kinnon Bell

    Kinnon Bell Finance Broker

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  14. Brendan_300

    Brendan_300 New Member

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    Your best bet is to complete a number of online quotes. Most insurance companies offer honeymoon discounted premiums of around 10% online. Considering multi policy discounts are around 5%, you usually always do better checking online every year.

    Additionally, a lot of the big companies now have properly location specific pricing, opposed to postcode pricing so if you're confident you're not in a flood zone, you should eventually hit a company that prices reasonably. If not, you can go down the path of seeking flood maps from your council and submitting then for pricing consideration.

    Hope that helps.
     
  15. Adelaide

    Adelaide Active Member

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    I was paying $2400 with CGU and am now with Youi for $800.
    3 x1 Brick lowset in Kirwan.

    Suncorp is a third of the cost for Body Corp Townhouses.
     
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  16. Simon Hampel

    Simon Hampel Founder Staff Member

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    So how did that conversation go?

    "Hi Youi, this is Adelaide from Perth and I need insurance in Townsville"? :eek: :D
     
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  17. PandS

    PandS Well-Known Member

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  18. Simon Hampel

    Simon Hampel Founder Staff Member

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  19. brettc

    brettc Well-Known Member Business Plus Member

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    What year was the property built? I've just done a quick calculation based on worst case scenarios (which includes built prior to 1972) and get a premium significantly lower than that using RentCoverPlatinum.
     
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  20. myusernam

    myusernam Member

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    late 50's early 60's.
    for those that are interested terry sheer ws the cheapest by a long way at $2600 beat a couple of brokers. ans they do landlords only for like $320 which I thought was excellent. means you can insure your house with a normal policy and then get the landlords seperate. I'm dissaponted they wouldnt quote my other property. They asked whether it was heritage listed and i said no but it is character residential and it was all over - wouldnt quote. Most other insurers were fine witht he character residential classification so i intend to take it up with them.