Strategies to reduce insurance

Discussion in 'Property Management' started by MTR, 8th Nov, 2016.

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  1. mikey7

    mikey7 Well-Known Member

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    Doesn't work with NRMA. Tried every year.
     
  2. dabbler

    dabbler Well-Known Member

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    I have been asked at random by various lenders over the years, many do not ask past the note and contract saying you must have it.

    Last time I was asked to supply current certificate was last week :)

    Your not technically supposed to do any serious renos or mods or building either, but people do. I suppose it will come down to how good the house is & or if your going to demo at some stage.

    You need liability though.


    I think they require liability, or most will & many set the amount as well, the landlord protections are the optional part, I have had the minimum amount set too on liability and building.

    In my other post, the choice can only be between those with a record of paying, this means a chunk have to be disregarded no matter what they discount or offer or price, there is only a handful of insurers that are worth considering.
     
  3. Big Will

    Big Will Well-Known Member

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    Insureance is always something everyone hates paying until they actually have to claim.

    For me having if you have a 1% chance of something bad happening per property the chances of claiming per year are;

    1 property - 1:100 years
    10 properties - 1:10 years
    100 properties - 1:1 year
    200 properties - 2:1 year

    They are all the same % of an incident happening but this is using 1% at 10% the numbers are a lot worse.

    Point I am getting to yes you might not have any issues for 5 years then all of a sudden a flood happens (e.g. Brisbane) and 50% of your properties are affected. If you can handle this cost of fixing then great financially you might of been better off getting insurance though :).

    FYI I do not work or have worked for insurance companies but this is part of risk mitigation and if you are okay with the risk then by all means not insure but if you are trying to save on insurance as you want more money it means you are taking on more of the risk so it could end up saving you money or end up costing you more.

    Wouldn't you hate it if in 2010 you had 20 properties and decided to cancel your insurance and self insure as it is costing you $30,000 ($1,500 per prop) and then the very next year all 20 were effected as you didn't diversify and you had 1/2 of the tenants break lease. This would surely cost you more than 30k but if these 1 in 100 year floods (which have happened more than 1 in 100) but if it didn't happen for 99 years you would probably be laughing.

    You live with your calls but insurance is to me a cost of doing business and I would prefer to increase income then cut the cost to an inferior product or service.
     
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  4. willair

    willair Well-Known Member Premium Member

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    Just have to ask the question do you know anyone that takes this level of risk,i have a mate in inner brisbane about 7 debt free properties started about the same time as me,,some double blocks and he does all maintenance rents removals..
    Now november last year a storm came into the inner southside massive roof damage,gutters could not take the flow rate internal damage ,from what he told me his landlord insurance paid with the $500.00 excess he had 5 roof complete refits,just do the numbers on that alone cost wise..
     
  5. MTR

    MTR Well-Known Member

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    With all my purchases part of conditions has been evidence of insurance and they stipulate the insured value required?
     
  6. Big Will

    Big Will Well-Known Member

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    It is only an issue when there is an issue.

    The banks will say they told you to have adequate insurance as part of the contractual obligations and since you didn't do that we will be taking the money from yourself and not chase after the insurance company.

    My bank has it as part of our conditions they want to see it when you first take out the loan but they don't ask me each year to provide the updated insurance as they would need to employ more staff for this administrative task for no dollar value and what are they going to do if you don't have insurance? Be bad PR having a bank collapse the aussie battler loan as they couldn't afford insurance.
     
  7. BKRinvesting

    BKRinvesting Well-Known Member

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    I managed to play around with my figures for my NRMA PPOR home and contents insurance this year to save $80 or so.
    So doesn't hurt to try ;)
     
  8. mikey7

    mikey7 Well-Known Member

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    Yeh if you change the figures it will be different, obviously. But if you want the exact same product and coverage, and figures, they don't budge. I've even tried calling them, and they don't care - even when 'threatening' with leaving them. I was a 10 year customer with everything I had. Now I will only go with them for CTP (because there is only an $8 difference between companies anyways lol).
     
  9. TadhgMor

    TadhgMor Well-Known Member

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    What about NRMA, anybody used them for Landlord Insurance IP Insurance etc?
     
  10. albanga

    albanga Well-Known Member

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    Yes most will ask and you can provide this within the first year. Don't however ever expect them to ask you again for this. I mean after all just imagine they had to chase every single home owner for an updated insurance policy every year!!
     
  11. daiwaqa

    daiwaqa Member

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    Very true, been with them for a few years and seems they dont want my business anymore, just left, today!
     
  12. BKRinvesting

    BKRinvesting Well-Known Member

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    I'm only with them because they provided home owners the least grief regarding payouts and coverage last time the blue mountains burned down.
     
  13. Ace in the Hole

    Ace in the Hole Well-Known Member

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    Buy in bulk/combined policies.
    Our LL ins are about 300 each for 600k townhouses, lots of 3,3 & 5.
    Buildings incl Body Corp is about 375 each.
    Can slightly under insure total replacement val as the chance of a complete wipe out of all properties in the complex is super low.
    Also, the LL ins policies are covered as a complete lot, so can also under insure as a total, as the odds of all properties claiming at once is crazy unlikely to happen.
    Any individual or even simultaneous claims would be easily covered by the combined allowed coverage.
     
  14. Serah

    Serah Well-Known Member

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    I used to work for IAG i got 50%discount if i have insurance with them that includes CGU NRMA COLES. Not any more, i have ALLIANZ now and not much discount.
     
  15. Elives

    Elives Well-Known Member

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    how do they determine it's "5 seperate claims"? so i know what to look for as i my properties with budget direct.

    Cheers, Elives
     
  16. Hosko

    Hosko Well-Known Member

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    A really simple thing I do is have clients populate a spreadsheet with the required information and then you have it and can send it to an insurance person/broker or 2 without too much hassle

    This can help too for the right person

    Disclaimer - I do work in insurance
     
  17. beertank23

    beertank23 Well-Known Member

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    << The best way to save on insurance is not to pay it >>

    Absolutely agree. Self-insure.
     
  18. Barny

    Barny Well-Known Member

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    Call em up and give them a hypothetical scenario of something that can go wrong. Then ask them how many claims they will charge you. Then ask how much it is per claim, how much they will actually pay for. Then do the same with a good insurance company and see the difference.
     
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  19. Elives

    Elives Well-Known Member

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    i will but i've never heard of being charged for several claims at once. etc if you claim on building insurance how is it possible to get charged 5x excess. has anyone else heard of this?
     
  20. Barny

    Barny Well-Known Member

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    Your tenant damages a wall moving a fridge, then damages the door on the way out with the fridge.
    That's 2 seperate claims with budget.
    Your tenant damages your carpets in 2 bedrooms, that's another 2 claims.
    You can have deliberate damage also which is another separate claim.
    Your tenants leave and pack your remotes from the airconditioning unit and remote controls for the roller doors(true story), and this is classified as theft....add that as another claim.
    Terry screen cap it at 2 claims maximum.
    Budget will charge you for everything you report damaged as a seperate claim. Add those claims up and it's usually more than the damage caused.
     
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