Insurance. It is the bill we all love to hate, isn’t it? After all, premium after premium is paid and it can feel like there is nothing coming back. For all those readers out there nodding along, I say, wait! Stop! Let’s pause to consider what the old insurance ball and chain does for us and set some perspective.
Insurance allows us all to sleep at night with the comfort of the knowledge that if something happens (trust me the ‘something’s’ can and do happen) insurance will look after us, our family and our investments.
It is extremely important for property managers to not only understand the importance of what insurance does for our owners, but also what specific polices cover.
Below are my top five things to know about your landlord's insurance policy:
1.Is your owner covered? If not, you should suggest they take out building insurance and landlord insurance immediately. If the property is part of an Owners Corporation, it will be covered for building insurance through the strata insurance. Landlord's insurance will also include contents insurance and yes, you do need to have both.
2.What is the excess on the policy? Different policies have different excesses payable should you wish to make a claim. It is crucial to know the excess, as there is no point lodging a claim for something that costs less than the excess.
3.How much loss of rent is covered? Your owners may have a landlord insurance policy that insists that the bond be used as the first four weeks rent in case of default. This is important to know when conducting an eviction. If the owner is not receiving the bond for cleaning they may wish to attend themselves to reduce out of pocket costs. A good landlord insurance policy can cover loss of rent for up to 15 weeks and will not include the bond in this, which leaves the bond to be used to reinstate the property (which, let’s face it, is generally needed in the case of an eviction).
4.What is the premium for the policy? This needs to be paid annually and if you don’t pay, you’re not covered... You may be able to pay this on behalf of your landlords to ensure up to date coverage for them at all times. A premium should be around $300 per annum.
5.Do you have permission to lodge and speak on the owner's behalf? This is really important as we are in the best position to get the information the insurance company needs efficiently to ensure a quick resolution for our landlords.
If you are armed with the above information, it will greatly assist your owners in achieving the best result. Your landlords will be able to sleep at night knowing that not only are they fully insured, but also their property manager can take care of things for them. They will both love you and see your value when you are able to successfully process claims quickly and with great results... even if they can’t bring themselves to love insurance!