QLD Townsville IP-house insurance is a pain in the neck

I've been watching TSV IP for 18 months, however the house insurance is way to high.
For example, for below house, with $1000 excess fee,
35 Daytona Drive, Kirwan, Qld 4817, 4/2/2, ask price 350K.
https://www.realestate.com.au/property-house-qld-kirwan-137037194
This one like most TSV house, has flood on the front street of the house but not affect the house.
Terrischeer quote cheapest building $2140 per year, I put building sum $350,000, but it's weird it only asked the suburb, didn't ask for detailed address, we all know in same suburb there's flood area and non flood area.
QBE quote building only $3,745 per year! with building sum around $384,877 (the cheapest I can choose)
AAMI quote building only $3,028 per year! with Buildings Sum Insured: $316,000 (the cheapest I can choose)
While NRMA quote building only $11,242 per year!!!
Your home is in a flood and rainwater run-off affected area.
Your premium includes $790.58(per month) which covers you for flood, rainwater run-off and storm surge. Your home will be automatically covered for loss or damage caused by these events.
This house price is 1/5 of cheapest house in Sydney, but building insurance is almost 5 times of Sydney house?
Any one can suggest what's your house insurance and how to get a cheaper quote?
This will magnificently influence the rental income?

 

Yep Townsville had floods a few years back and most insurance companies have jacked up premiums for new insurance policies. Appears risk of weather events and the type of property and its features etc also contribute to the price I suspect

The other costs probably to keep an eye on is the Council Rates and other Levies that are charged annually.

 

Thanks Peter, I do found some dual living house has really high council rates.
Is there any other special rates we may need to keep an eye on?

 

There is usually no “floods” on the front street. In (the newer part of) Kirwan, the streets are designed as flood mitigation. So water will flow down the street into the drainage system and that’s why most of those streets were marked “0-0.3m”.

A lot of insurance companies mark up their insurance premium because they don’t have enough data or because of the lack of granularity in their data. Terri Scheer is the better option out there but again it’s based on the suburb level which means your premium will be dragged up by the properties affected by flood in Kirwan.

I have been using Comminsure for my Townsville properties and in most cases the premium came back around or below $1000. The data is more granular and your premium is based on a micro-suburb level instead of the whole suburb.

The only exception I have found so far is for my property in the Greenwood Estate where there are lots of properties nearby affected by flood near the flood mitigation (e.g. towards the end of Wheeler Cct and Fielding Way as you can see from the flood map). CommInsure came back at ~$3000 and Terri Scheer came back at ~$2100 and I've picked Terri Scheer.

Screen Shot 2021-09-19 At 12.24.42 Pm by alanyin posted 19th Sep, 2021 at 12:26 PM

 

At those insurances prices I'd be running for the hills and never looking back.

 

Suncorp has flood insurance as standard ...... don't know what impact that has

 

Apparently TSV cops cyclones too.

You aren't going to find Sydney prices in TSV.

I'd second having a look at Suncorp, does NRMA cover Qld or would RACQ be better?

 

Main driver of high premiums would be cyclones.

 

You won’t find Sydney insurances prices in regional areas especially with the flood and cyclone threat. Surprised you have not spoken to Suncorp, I find NRMA are off the planet for Qld addresses

assuming you want building only and then will be a seperate landlord/contents policy?

 

Youi is flood phobic as well. Wouldn't quote on two of my properties even though they have not flooded previously

 

I've found Sure insurance competitive for far nth qld

 

Is it even worth considering Townsville for IP given the Insurnace costs? Or do you just not get insurance?
I've seen a few BA's mention it, but then I search up the properties they purchased and premiums are at least 3.5k p.a. for a basic 3 bedder... those poor clients.

 

You can increase your excess and reduce the sum insured and u get insurance under 1.5k.

Townsville is good cf play with potentially high upswing (relatively large hub with medians under 500k). my guess its next one to shoot up - there is just not many places left with under 500k medians.

 

I agree but the wait is always longer than expected. It might not be a

Omg, this is the last time I'm posting this. Consider total holding costs, that's all that matters. Paying 1.5k extra insurance is the same as the interest payments on 25-30k. You can't worry heaps about insurance but not about interest costs for higher purchase price properties. 1.5k pa is also about 30pw.

Yes, you shouldn't buy on a floodplain but other than that it is just a fact of life.

 

Also got to factor that in Melbourne and Sydney you are paying $1mil from medicore homes to be honest. Even after paying the insurance over your life you would still be ahead.