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QLD North Queensland - What's the go with the insurance issue?

Discussion in 'Where to Buy' started by JenJen, 9th Jul, 2015.

  1. JenJen

    JenJen Well-Known Member Business Member

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    Hi

    This topic pops up again and again in general discussion about North Queensland. It's a complex issue, which I believe it is worthy of it's own thread.

    From my perspective, things have definitely moved forward in recent years, particularly in the housing market, but general perceptions are not necessarily keeping up. I believe that if you are paying over $2,500k for insurance on a 4 bedroom house, you can probably do better. So the purpose of this thread is for us to share a more detailed understanding of the issue, and how to get around it.

    Cheers

    Jen
     
  2. Perp

    Perp Well-Known Member

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    The Australian Government Actuary has compiled a comprehensive report. A skim suggests to me that, historically, insurers had been underestimating the impact of cyclone, and after sustaining heavy losses, prices are now catching up to reflect the actual risk.

    Here's a link to the report.
     
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  3. JenJen

    JenJen Well-Known Member Business Member

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    A lot of research has been done into the insurance issue, from consultation to data comparison across Australia. The research all confirms the existence and extent of the issue in the recent past. There is also a lot of work being done and planned for the future. However, I don’t believe there is a source or point of reference that can be used by investors to work around the issue at this point in time without compromising on the level of cover.

    Plenty of investors do obtain reasonable insurance premiums. In my experience there are a number of ways to do so, that go beyond shopping around. I believe that to understand how to obtain reasonable insurance/reduce high insurances, you need to consider the following:

    · What is the history/background to the issue?
    · What is the difference between the housing and unit market?
    · What do Body Corp’s have to do with insurances?
    · Who are the main insurance providers?
    · What factors influence insurance policies?
    · What criteria do insurance providers use?
    · What about insurance brokers?
    · What is being done to address the issues?
    · What changes can already be seen?
    · What can investors expect and do to obtain reasonable insurances in the region?

    Cheers

    Jen
     
  4. Azazel

    Azazel Well-Known Member

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    What are your thoughts on getting 'normal' insurance and then adding landlord insurance from Terri Scheer? Are there any issues or benefits with doing it that way rather than getting both from the same company?
     
  5. Bran

    Bran Well-Known Member

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    I'm paying $5000 on a 3 bedder brick house outside a flood zone. It's insane. I'm processing a claim now, and then will shop. (Can i do this without processing the claim or will they play difficult?)
     
  6. Perp

    Perp Well-Known Member

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    You can shop around now; it's only important who was insuring the property at the time of the insurable event. Who holds the insurance subsequently is irrelevant. :)
     
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  7. Bran

    Bran Well-Known Member

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    Cool. I just emailed my PM to hurry the claim anyway. 5000. ridiculous.
     
  8. Kinnon Bell

    Kinnon Bell Finance Broker

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    Wow, yeah. I'm in a red flood zone and my insurance is 'only' $2.6k pa.
     
  9. Bran

    Bran Well-Known Member

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    Through ANZ - the chumps did an online comparison with another company and came back cheaper. Turns out they compared it to their parent company. Any recommendations? Does anyone do home insurance brokering?
     
  10. Kinnon Bell

    Kinnon Bell Finance Broker

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    I can recommend a Cairns based insurance broker but he has said himself the insurers on his panel aren't any cheaper than what I've be able to source myself (RACQ).
     
  11. Perp

    Perp Well-Known Member

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    I really, really don't recommend buying home insurance based on price, but on best coverage and claims reputation. As it turns out, one of the best was also one of the cheapest (in my case).

    Good tool here for determining who has best coverage in your area and circumstances: http://www.canstar.com.au/home-insurance/
     
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  12. Kinnon Bell

    Kinnon Bell Finance Broker

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    Nor do I but when there's a ~$10kp/a price difference in policies price can certainly be a deciding factor. For me RACQ is the best and the cheapest I found that had all the items I required to be insured for (flood being a major one)
     
  13. Perp

    Perp Well-Known Member

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    Sure, but I'd only use price to discriminate between quality policies and insurers. No point having it at all if they're going to be a PITA when it comes time to pay. (< Very possibly influenced by having spent nearly 3 years fighting our previous insurer - we ultimately won but it shouldn't have been so painful)
     
  14. JenJen

    JenJen Well-Known Member Business Member

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    Hi Azazel
    The main issue is the Building Insurance. My understanding is that Landlords is negligible in comparison.
    Jen
     
  15. Perp

    Perp Well-Known Member

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    I'd treat them separately. Both types of policy vary dramatically in terms of coverage and "willingness to pay out" between companies, and it's unlikely that the same company is optimal for both.
     
  16. Azazel

    Azazel Well-Known Member

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    Hey @Perp , do you get home insurance separate and then Terri Scheer for landlord insurance?
     
  17. Perp

    Perp Well-Known Member

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    I'm not holding any IPs at the moment, but yes, that's what I used to do.