Hi Guys I stumbled upon a link the other day for Landlords Insurance offered through kogan.com.au and found that it was run in partnership with real life Insurance. I had a look and got an online quote for hopefully a comparable current policy with EBM for almost $300 cheaper with Kogan/Real. Values for buildings and contents etc were the same but the excess for each claim may have been $100 higher with Kogan. Kogan also offered 10 weeks rental loss compared to EBM 6 weeks. Am I missing something in the fine print/pds as this seems almost too good to refuse? After a recent claim with EBM, we had to pay I think 4 lots of $400 excess ie alleged different events. If anybody with a keen eye for this sort of thing can have a look over would be much appreciated. Landlords Insurance | Kogan Insurance https://www.koganinsurance.com.au/w...-insurance-home-contents-30-10-2015-pds-1.pdf https://www.rentcover.com.au/files/pdf/Forms & PDS/RERCA4108-RentCover-PDS.pdf
For insurance we've found that the devil, whilst always in the detail (of the PDS), is more in the handling of the claim in the event one is lodged, particularly how much the provider tries to get out of it! For example, the major bank insurers are terrible in this regard and make life extremely difficult, often rejecting items that companies like EBM and Terri Scheer do not challenge. I personally have always found that specialist companies are the best to deal with because it's their core business. Almost any insurance company can be traced back to being unwritten by Lloyds of London anyway!
We had an awful time with a claim on Terri Scheer. Between an incompetent Terri Scheer representative and a less-than-satisfactory PM the claim was mishandled all along the line. Between the two of them they could not even get basic maths right. Thankfully hubby was an insurance broker and took the issue to the CEO (who was quite horrified) and had the claim settled promptly and fairly. Anyone not familiar with insurance law and policy wordings would have been significantly underpaid. This was quite some time ago. Hopefully we were just unlucky. Marg
I don’t generally like to go into direct comparisons of policies or where one may fall down, but as you have specifically asked the question and compared it to an EBM policy, I think it’s appropriate. Having been in this industry for over 25 years and seen so many people “burned” by insurance policies that were not up to scratch, I really think it needs some attention. So here is a bit of a summary as we see it (this hasn’t been an exhaustive exercise but should point out some significant points). No cover for landlords contents in storage No specific cover for drug labs which raises several concerns: - under fire it specifically states that there is no cover if it is “caused by the ignition of any mineral spirit or dangerously flammable substance brought onto or kept at your site in quantities which are in breach of any statutory regulations.” – this one is a huge concern with the proliferation of fires caused by drug lab explosions these day - under liability there is no cover if the loss is “from the supply of any alcohol or drugs;” - as “deliberate acts” are excluded (see below) and malicious damage requires “structural damage to be present” it would seem unlikely that there would be cover provided for contamination and cleaning from a meth lab No Accidental Damage cover – this one is massive and is probably the biggest failing of many policies by major Insurers. I have written many times regarding the risk of only having cover against Malicious Damage, so won’t repeat it here, but I can regurgitate it all if need be. No Deliberate Damage – further to there being no Accidental Damage it would appear that Deliberate Damage is also excluded based on a general exclusion in the policy: “any deliberate action by you, others living at the site, or other people who have entered your site with the consent of you or others living at the site, including visitors and tenants;” No cover for replacement of locks. Maximum cover of $35,000 for Malicious Damage, plus there is an exclusion under this section that may make it very difficult to prove tenant damage at all. No mention of pet damage being included, there is also a specific exclusion against “scratching, chewing, tearing or soiling by any animal kept in your building or at the site” which would indicate that it would not be covered. There is no mention of loss of rent due to “Denial of Access”. We would assume this simply falls under “Arrears with a court eviction” and as with other loss of rent scenarios is limited to 10 weeks. This same limitation exists for “Prevention of Access” and can be drastically insufficient should these events occur. Legal expenses limited to $1,000 There are a number of other more minor areas of concern that I won’t go into. Again this would appear to be the case of you may get what you pay for, so to save a few hundred dollars you may need to accept that you are putting yourself at risk of suffering significant losses that would have been covered under some specialist policies. Interestingly, our latest newsletter (The RentCover Report) which is due out shortly has a specific article in it that is very relevant to this situation. In the article, research (by the Landlords' Advisory Service) has found that 40 percent of property investors have the wrong insurance. This hasn’t been distributed yet but I will give you a link here for anyone who isn’t a subscriber to the newsletter (it actually has a heap of stuff really relevant to landlords so is worthwhile). I hope the above makes sense and may provide an insight into why some policies are a bit cheaper. It’s often worth heeding the advice of people in the Property Management industry who as a general rule have found that the specialist policies will provide the best outcomes. Final comment is that I appreciate that no insurance is perfect, there is always pros and cons, but with an investment the size and significance of an investment property, it's vitally important that you understand the risks you are taking when you go with a big name high publicity campaign because it's "cheap".
Brett I can understand the reluctance to do that but its a good review based on experience and qualifications. The seller of the product probably cant even do this comparison as it is a financial product. Kogan has made a name selling anything they can make a margin on. Good or bad. Copied the Branson / Virgin model in some respects. Cheap insurance fills a market - Cheap people who dont read policies. The T&C are critically important. You can end up uninsured.
