All Topics / Help Needed! / LANDLORD INSURANCE
Hi guys,
Having just brought my first IP I'm currently looking at getting some insurance. The IP is a unit so building cover is included in the Body Corp. (Just wondering, there is 4 units on the lot with a cover of $700,000, does this seem right? is it divided by four if all units burn down or need to be rebuilt? what if just mine gets ruined.)
Do I need contents cover as there is no furniture of mine or personal items in the IP but there is things like carpets, curtains, lights, air-con, heaters, dishwasher etc. How do you know what you should cover this for eg, $ 10,000, $20,000? (2 bed-room unit)
I have got a few quotes , all around $330-$360, does this seem reasonable?
Thanks guys!
VI, you own whatever is within your walls – carpets, paint, kitchen, built-ins, light fittings, bath tub/shower screen, basin, tiles etc. Visit a few showrooms to get a feel for what the fitout is worth to replace then depreciate it to its current state. Very few policies will cover new for old and you will always be caught short.
Consult your Cordells for replacement cost of the building – insured value includes 10% for demo, 10% for consultants etc so there goes $140k from the construction cost. Does $140k/unit excluding fitout cover you?, does the cover include loss of rent/alternative accommodation during reconstruction?
I would definitely get contents cover for the fixtures and fittings such as carpets, kitchen, lights, etc. Speak to an Insurance Broker to help you work out what you need.
Also, make sure you get Landlord's insurance. It is about $200 or so per year.
All insurances are tax deductible, so it may even be prudent to take out your own building insurance as well.
Always get more insurance than you may need if in doubt as to the amount.
On the whole insurers will only pay out the barest minimum that they are required. If you are over-insured or double insured you will only get paid up to its value (split by the number of insurers). They win.
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