Good morning all, just got a shock when I tried to renew my insurance policy with AAMI.
I have the AAMI landlords insurance which covers me for malicious damage, arson, etc from tenants.
However, I live in the house and rent three rooms out. I am thus classed as a boarding house and my insurance is almost totally void.
It turns out that if I was to rent the whole house out, I am covered for everything, but they would not cover it if someone was running a home business from it, or if I am living in one of the rooms.
I find this strange, as me being here makes it a lot less likely for any weirdos or wackos to be staying here, as I will obviously be actively managing the property.
SO, I rang around all of the other insurance companies amp,m gio, nrma, cgu, r+g, and they all seem to say the same, not a problem if you rent the whole house out, but no cover at all if you run a boarding house!
I have also talked to a few brokers, again with little luck. One said I might be able to get insurance if I class myself as a bed and breakfast, as this would be heaps cheaper than being classed as a boarding house.
There must be thousands of people who just rent a room in order to help pay off the mortgage or rent, but we seem to be left in the lurch insurance wise.
I can always go naked insurance wise, but would prefer to be properly covered.
Can anyone suggest where I might be able to get cover? ps I own the home
Try
the question online asks you: “are you and owner occupier?”
Your answer would be yes. Naturally it then doesn’t ask if you have boarders so I wouldn’t think you would have to ask? I’m not so sure. I tend to go hazy and forget stuff occasionally…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055I used a broker who found me insurance for a share house I was living in and renting out rooms. It was about $15,000 pa. (no misprint) $15,000!. To do it 100% by the book.
In the end I took out normal investment property insurance with one company and took out home owners building insurance with another.
If it had of come to the crunch, I was hoping to argue that because the number of tenancies in the house were less than the local councils “prescribed accomodation” min. number, that it was only a normal rental.
Also check your local states Tenancy Guidelines for the minimum number of tenancies to be actually deemed to be running shared accomodation.Maybe drop a tenant or two.
Or if you know the people, simply charge them board as friends. And insure as a owner occupied home. (I think this is ok)
I would suggest that whichever path you choose is within legal guidelines, because if the Insurance companies can find a reason not to pay you in the event of a fire, guess what!
And a warning to anyone else that is running a share house without full insurance, Have you considered what public liability you would have to personally pay if one of your tenants were killed in a fire??????
It’s not just the loss of a building you may cop!
Live, Learn and GrowLifexperience
I've recently found myself in the same predicament. I own and live in a 4-bedroom house and have 3 unrelated persons living with me who pay me rent. Apparently, even if I moved out and rented out my room, I wouldn't be able to get landlord's insurance. Does anyone have any up-to-date info following the original post? Can anyone give me some names of insurance companies offering such insurance.
There are so many shared 4+ bedroom houses out there, how are they covered?
I have a colleague that runs two boarding houses. They use AAMI for the building insurance, and Terri Scheer for the landlord insurance. http://www.terrischeer.com.au I know they've claimed on it, too.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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