This information was presented yesterday at the Adelaide Property Network meeting by Brett Leonard - the SA representative of Property Insurance Plus. A specialist landlord insurer, equivalent to EBM and Terri Scheer. Average Loss of rent Claim $4,000 - $5,000 Average contents damages claim: $1,000 - $3,000 Average building damages claim: $5,000 - $10,000 Increased LOR claims throughout SA - Rent Default & Absconding Record number of claims lodged in SA for the 2015/2016 period PIP claim payments over the last 12 months: $2,300,000 + SA claims payments over the last 12 months: $1,100,000 + This fits in well with an observation we have been seeing in our agency over the last 12 months too. (Although we have only 200 rentals and statistics are not significant with small numbers - try to run any statistical analysis on a small number - it does not work significantly). However our "observations" have been confirmed above by the huge number of claims through an insurance company. Also many other agents are experiencing this same trend. An increased number of absconding and defaulting tenants and we are talking about tenants with no previous defaulting rental history. It is correlated with unemployment in Adelaide, tenants walking out of rentals to get jobs interstate, job loss and also sickness and divorce. Have a look at total number of claims $2.3 mil across all states and half of that is in SA alone. He also mentioned Victoria has a 38% default rate and SA has a 70% default rate. That is for every hundred dollars the insurance company receives from total amount of premiums, $70 is paid back to loss of rent claims for SA clients. Insurance companies are running lean and SA tends to be less profitable for the insurer according to these stats. What are they doing about it? Un-partnering with certain PMs who are making themselves to be part of the problem. Inadequate screening procedures, not mitigating losses for the insurer (or the landlord) by advertising quickly enough, not obtaining orders for vacant possession for clients, not issuing breach notices on time etc. Market conditions cause the above to occur and property managers need to be mitigating and handling those losses as best as possible not adding to them. This insurance company has already refused to insure properties managed by certain SA agents and they are running checks on many more of them. @sash asked me on the phone today whether the increased claims were associated with specific Adelaide areas. Our speaker last night said NO, there are claims all over Adelaide. He was a very nice and politically correct person. My own observation from our agency - yes claims all over but we have them mainly concentrated in the outer Northern and outer Southern areas than any other part of Adelaide. This is only one insurer, but I would suspect other insurance companies have similar stats as economics effects everyone similarly.