Landlord insurance- what to take out?

I have couple IPs and was reviewing the insurance policies, wanted to see what other people are insuring for. I currently have building insurance, accidental damage, and loss of rent. My insurance premiums ranging from approx $800-1250/year depending on the property, currently with CBA. It seems building insurance is a no brainer however,

1. Do you guys have contents insurance?
2. Accidental damage?
3. Malicious damage?
4. Loss of rent?
5. Approx how much is your annual premium? And which company?

Cheers

 

I am a big believer in insurance as I cant afford to lose it. Contents you would need to have minimal as you don't have heaps of items there unless you are keeping stuff stored under the house or something and it is part of the lease.

For me I don't enjoy paying for it and hope I never have to claim on it but if you ever do you are glad you have the insurance then not having it.

I have never heard anyone say I am glad I didn't pay the extra $100 a year when they require something from their insurance company.

In theory I guess you could call insurance as gamling, you are hedging a bet that something may go wrong. If you do you are glad you have it but if you don't you wish you did have it, however if nothing goes wrong some people think it is a waste.

 

It would depend on your personal risk profile. For mine the answers are
1. Yes, a token amount
2. Yes
3. Yes at the moment, but longer term tenants I take it off
4. Yes, I need something to live off or pay the bank back
5. Irrelevant as it depends on the location, the quality of the house,etc and I work with an insurance company so I use them

 

1. Contents for landlord is different to the contents for an occupier. As a landlord, you do not need to insure any items belonging to the tenant. Landlord contents generally relates to items that are not permanently fixed to the dwelling such as light fittings, window coverings, some appliances and (if you believe it), carpet. Most landlord policies are generally designed to cover you for some landlord contents and depending on the provider, you can either choose the amount or there is a minimum fixed amount. The amount you need varies depending on the dwelling size and what is covered under the strata insurance. For my smaller units, I only have $20k as that would be enough to paint it, replace appliances, blinds, carpet and light fittings. Strata insurance would take care of the rest so building insurance not required. For my houses and non-strata titles dwellings, I have a lot more in contents. Remember, if the place burns to the ground you won't necessarily be covered for a lot of items in a complete rebuild so contents insurance to cover those items (and possibly more depending on the policy) is an absolute must. Terri Scheer for example have a minimum of $60,000 and for good reason.

2. Yes, I do. A very small premium addition for an amount beyond the bond.

3. Generally included in most policies but check the PDS.

4. Same as point 3

5. LL insurance policies vary greatly, particularly in the loss of rent and flood scenarios in my experience. For example, one policy I read paid 10% of the value of the insurance for loss of rent (classic fine print!). Given I only wanted to insure the unit's contents for $20,000 that meant in a loss of rent scenario I would only get $2,000 of 'loss of rent' - no where near enough! Another policy on the same dwelling has a fixed 52 weeks rent regardless of the insured amount and the policy was only $50 more and the contents amount was triple. When I queried the first company to confirm, their response was, "Well it's not designed to help you pay your mortgage,"...?!?! If the place burns to the ground, it's going to take a lot longer than $2,000 worth of rent to get it back to liveable status so choose wisely. There is often a loss of rent clause in strata insurance so don't over insure but read the fine print as to when they will pay that out. Again, in my experience it's usually better to pay a little extra and have water tight coverage (excuse the pun). I've used a raft of companies over the years but now I find Terri Scheer to be the best as they basically specialise in landlord insurance and they do not muck you around in the even of a claim.

- Andrew