Property managers may have a disaster on their hands if they don’t prepare landlords for the surprisingly realistic possibility of an earthquake.
Strata Community Australia chief executive Kim Henshaw warned that thousands of buildings in New South Wales may have inadequate earthquake insurance policies, despite the state being exposed to recent seismic activity.
Mr Henshaw cited a 5.7 magnitude earthquake recorded in Queensland in July, as well as recent activity off the East Coast, as a reminder that buildings in NSW are at risk of damage from earthquakes.
“We want people to abandon the complacent 'this won’t happen to me' psyche because, contrary to assumptions, Australia is a very active location for seismic events,” he said.
Coronis Mooloolaba senior property manager Kelly Parr told RPM that her company tries to educate clients on all aspects of property investment, including natural disaster cover.
“Who their insurer is will decide whether or not they’re covered for natural disasters,” she said.
“If they have insurance through a company that purely concentrates on landlord protection insurance, then this is something that is included in their policy,”
According to Ms Parr, it’s vital to keep clients up to date with changes to legislation.
“We will usually go through the insurance options when they are initially signing up with us to manage their property, as it is important for them to be covered from day one,” she said.
Ms Parr noted that the recent seismic activity will likely mean insurance companies will be taking this more seriously and ensure it's part of the policies they offer.
“As an agent we will also need to be well educated so we can pass this information on to our clients,” she said.
[Related: How to survive when disaster strikes]