My brother in law has quit working and is finishing off his first investment property which he is planning to sell shortly for a good profit.[biggrin]
I just found out yesterday that when the insurance was up for renewal, he decided not to renew it. I’m nervous about the possibility of him losing it all in a freak accident but he’s happy with the risk.[bonjour]
The problem is that it’s just another in a long list of expenses that’s is tought to meet now that his cashflow is drying up.
I’m nervous for him but am I just being overcautious?[blink][angry2]History is scattered with the dashed skeletons of people’s future plans because they skimped on insurance. He may be lucky this time but if he isn’t – bad luck and tell him not to come whinging when it all falls apart. Besides he can get most of the premium back when he sells the property.
Qlder
Hi,
Two weeks ago, a tenant of ours (in NZ) decided to empty out the woodheater and placed the remains in a plastic bin in the garage. She supposedly hosed the bin down…
That night (2am), the garage (with their car & belongings in it) burnt down.
The insurance company has since assessed it, and is now arranging for removal of debris and arranging to build the new garage for me.
It could have just as easy burnt the whole house down, with tenants in it.
Try to convince him otherwise… it is just not worth being involved in property investment unless you are well covered with insurance.
Del
His lender may very well require a certificate of cover.
Recently built houses are often targeted by thievesafter new HWS and electrical items such as ovens, dishwashers etc.
I wouldn’t risk it myself.
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985NODOC Loan – 65% Loan – No questions asked!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Noob, would you consider taking out insurance yourself on his behalf, this may seem a bit charitable but he is family and the fallout if something did happen could be enormous.
You might find yourself accommodating an unemployed, financial basket case…Hey Noob,
My only response to your question is to say, that the only time you will ever fully appreciate its (insurance’s) worth is when you have had an incident!!!
The number of times I would talk to victims of house fires whose homes (and lives) were ravaged by blazing infernos leaving behind loss and devastation, has firmly planted the answer in my head…..So is it worth it???
ABSOLUTELY!!!!
Fingers crossed that you (or anyone you care about) never have to find out just how much so!!!
Jo
P.S. Take your brother out on a day trip to the local fire department, and ask them to show you photos of incidents they have attended (if you are in Vic; PM me and I can organise a personal escort); that’ll have him RUNNING to his nearest insurer!!!
Of course it is Nob
there is a old saying in the travel industry, if you cant afford insurance u cant afford to travel. i think you can apply that too the housing market.
If you don’t buy the insurance to cover then you better not to invest in property.
Kind regards
Jet Dollars
“The road of some-day lead to the town of nowhere”Originally posted by Noob:I just found out yesterday that when the insurance was up for renewal, he decided not to renew it. I’m nervous about the possibility of him losing it all in a freak accident but he’s happy with the risk.
Hi Noob,
Agreeing with the previous comments and I would never be without insurance on my assets.
But at the end of the day it is for the individual to decide what is right for them – and as we know some people are bigger risk takers than others. Sometimes they win sometimes they lose.
Sure by all means explain the benefits of insuring the property but at the end of the day the consequences (either way) are a direct result of the decisions made by him.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
20 houses 20 insurances, no questions asked no quarter given.
DD[buz2]
Don’t sweat the small stuff,and it’s all small stuff!!
It’s his choice, but some people think insurance isn’t worth it, beacuse if you don’t use it so you’re not getting you monies worth. Can’t understand that myself, but have heard it said many a time.
Does he have car insurance? Health Insurance? etc. Ask him what the difference is. You are paying “just in case”, not so you can get your monies worth out of it. I have spent much more on insurance than I’ve ever claimed, but wouldn’t have it any other way. If a big incident did happen I don’t have the cash me to fix it, so that’s why I choose to insure instead.
Do remember though, we all make our choices and have to live with the consequenies of our actions. You can’t make him take it out, but do remind him that the conseuqencees are his alone.
PK
I don’t even worry so much about the house burning down – in the end rebuilding a house is a finite cost.
It’s the PUBLIC LIABILITY angle that’s absolutely essential to be covered. If someone trips on a step in your house and sues your backside off, you want to have insurance cover. Even if all they do is hand over the money, at least you don’t have to deal directly with the stress and pain. Those sorts of claims can go on for YEARS!!!!Keep smiling
Felicity
You know the old saying. When you have it you never use it, when you don’t you need it.
IMHO It is just far too great a risk to not have.
You would not take $100 000 or what ever your property is worth into a casino and put it on red would you?
Its only a few hundrend bucks and it’s one of the few things you can claim back on tax.
Tell your brother not to take the risk!
You will always miss 100% of the shots you don’t take!
Originally posted by FW:It’s the PUBLIC LIABILITY angle that’s absolutely essential to be covered.
Felicity has raised an often forgotten issue when considering the worthiness of insurance. A house burns down and ‘all’ you are up for is new house, lost rent and contents.
A tenant hurts themselves due to your negligence and you are potentially looking at millions in a worse case scenario.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
Definitely have to buy insurance, just because you can’t quantify how much you’re up for in the event of an accident.
I just settled on an IP in WA. A week after settlement the PM emails me and says part of the fence blew down due to strong winds! Luckily I had insurance from day 1.
A few hundred dollars for a good Landlords Policy is NOTHING compared to the potential losses in the event of an accident.
Alex
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