Check your insurance this weekend
Now is the time to be checking your insurance to make sure you’re well prepared over the Christmas season, according to new data.
Customer results from GCU Insurance have recently revealed that landlords across the country made more than 10,000 claims on their property insurance over the year, with storm and water drainage being the most common.
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The average claim was for nearly $4,000.
“House and contents insurance will generally pay to fix storm and water damage, but what about the loss of income if tenants cannot live in the property?” said Reece Williams, CGU Insurance’s national personal lines manager.
For investors who rely on the income from their property to meet repayments, this can be absolutely crucial and worth investigating.
“Some landlords have investment properties and use negative gearing to help manage their taxes. In these cases, the lost income could be disastrous. A landlord could end up suffering significant financial losses if they don’t have the right insurance,” he said.
“Damage to an investment property can be a major inconvenience for both landlord and tenant, and a costly exercise – it’s important to ensure you protect your investment,” he said.
He recommended ensuring the policy covers both building and its contents, checking strata insurance inclusions, checking that the policy covers any additions such as loss of rent or tenant theft and being diligent about getting the correct tenants.
Investors should also know what is covered under a policy before they consider changes to a standard lease agreement.
RentingSmart's Ben Levi told Smart Property Investment his top tips for investors when it comes to insurance this season:
• Review your insurance policies. Not all insurances are created equal. Make sure you are covered for both landlord insurance AND home and contents. Some policies may bundle these together, while others do not. Please ensure that you are covered for bush fires, storms and floods.
• Prepare your property and your tenants for emergencies. Provide your tenants with storm, fire and flood check lists (provided online by emergency services).
• Keep a well maintained property. Ensure that your property is structurally sound and meets all conditions in your policy that could otherwise disqualify you from cover.
• Your building sum insured should be adequate to replace your building and its fixtures and fittings using new materials as well as other necessary costs in the event of a claim. Almost a quarter of Australian households are uninsured, and the majority of insured properties are under-insured for a rebuild. (Insurance Council of Australia, 2007).