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Qld townhouse - questions re insurances (new landlord, first IP)

Discussion in 'Property Management' started by phoenix555, 2nd Oct, 2016.

  1. phoenix555

    phoenix555 New Member

    2nd Oct, 2016
    Hello! My dad died a few months ago and I've been gifted a townhouse that my parents owned as part of his wishes.

    • 2br townhouse, southside of Brisbane
    • valued at $330k, built in mid-80s
    • completely flood-free from the past two major incidents
    • renovated (refreshed) in 2014 with all new carpet, all new paint, new stove/rangehood, toilet, downlights, new fittings etc
    • current tenant in place with $350/wk rent (hoping they will renew for 12 months)
    • managed by a real estate agent (will retain)
    • part of a 'four-pack' of connected townhouses, and part of a larger group
    • parents currently have building insurance (RACQ, but mum can't remember for how much), no landlord's insurance, no contents insurance
    • body corporate management, on standard format

    • I started to get some online quotes for building insurance, and the first one said they don't insure properties under body corporate management - that was my first inkling that this is a new kettle of fish!
    • I've contacted the body corporate asking what their insurance covers, but no response yet (a week later)
    • I've done some reading and I'm still confused about what insurances I should/shouldn't take out, and what kind of amounts I should be thinking about, what kind of things are important to look for in a policy. I don't want to overpay by doubling-up on something that is already covered or isn't necessary

    • So I should take out building insurance, but this is more for the internals of the building that may need coverage, yes? eg stair rails need to be replaced due to an accident. The Body Corp insurance usually covers the externals of the building? Therefore I don't need to insure for the full $330k - but how much would ensure I'm covered but not excessively? $100-150k?

    • what happens if the tenant hurts themselves and claim it was due to something faulty in the townhouse (eg stair railing was loose, and they slipped down the stairs)? Is there some public liability as a standard inclusion in one of these insurances?

    • I didn't think I would need contents insurance, as the place is not furnished, but apparently I should, to cover fittings?? If so, how much should I be thinking about? $20-30k?

    landlord's insurance? must have? what sort of things do I need to know, look for, what are the most common claims?

    • does anyone do combined package of all three insurances? better to keep the three insurances with one place, or shop around for the separate ones? Canstar recommends Allianz for landlord's insurance in Qld.

    My apologies if these all seem like basic questions, but I've done some googling and reading, and want to ensure I'm doing my research. I've only just found this forum (saw the recommendation in Reddit), so I plan to do a lot more reading and learning around here. Anything else I should be looking into, as a newbie to this?
    Last edited: 2nd Oct, 2016
  2. Big Will

    Big Will Well-Known Member

    18th Jun, 2015
    Melbourne, Australia
    Sorry for your loss.

    1. I am very risk adverse and I would recommend you get landlord insurance. For the cost of approx. $300 p.a. it is well worth it for peace of mind.

    2. If the building isn't covered by the owners corp then you would need to cover this and I would cover it, if two buildings share a common wall then it would be highly likely they are covered in it but not gurateeed. You should probably follow up with the owners corp and attend their next meeting so you can exchange details with another member there if you need something (or if they have an issue with your tenant :) ).

    3. You can combine with certain insurance places but you can also mix and match e.g. RACQ building and EBM LL (these are not recommendations but nothing wrong with them either).

    4. Public liability should be covered under the owners corp for the public areas, if there isn't any insurance you really want to get this addressed asap but it is extremely rare there isn't any insurance for public areas. Within the building yourself LL insurance will this event.

    5. LL insurance isn't mandatory (nothing is except death and taxes), like with all insurance you never like paying for it but if you ever need to claim on it you are glad you have it. E.g. not sure if your father had life insurance but if I was about to die I could pass a lot easier knowing my wife and our family/ies would not have the financial burden of losing me. Nothing worse than leaving a loved with one huge debts and having to force them to do things you didn't want to have happen (e.g. selling PPOR).

    As far as a tip I would recommend you keep the tenant on a fixed lease at all times unless you plan on doing something different with the property (e.g. move into it/renovate/develop). Reason being on a fixed lease you are covered better by insurance and you also have a better SANF (sleep at night factor) knowing the place is rented until x and hopefully have more notice if the tenant decides to move on.

    Besides this tip there are countless others but if you read a lot on the forum things will make more sense and ask questions for things that don't :)
    Colin Rice likes this.
  3. Matthew Savage

    Matthew Savage Member

    10th Nov, 2015
    Brisbane, QLD
    Hi there,

    I'm a QLD body corporate manager.

    Body corporate insurance is building insurance. It covers building elements (but not unfixed contents, carpets etc).

    The body corporate is required by law to hold building replacement insurance for townhouses that are attached to other buildings. Unless your property is totally freestanding with no common walls, it should be insured. Even if it is freestanding, it may be part of an opt-in insurance scheme (this should be in AGM minutes, or on body corporate records).

    The body corporate must provide that information to you. You have a legal right to inspect the body corporate records and view the insurance documents. There is a small statutory fee to do so.

    You will also need landlords insurance. That will generally insure carpets, light fittings, tenant damage and rent default etc. There are people on this forum who work in that area who might be able to chip in.

    Cheers, Matt