Summary

It is important for Head Office to be able to provide general information to all agents on the importance of each property owner and investor having relevant and adequate insurance covers on their property.

Agents are not licensed or qualified to provide direct insurance (or financial) advice so it’s important to understand that any information we provide our agents, and subsequently the agents provide their clients, is very general in nature and not specifically outlining what any one particular insurance cover would include or exclude.

As a general rule of thumb all owners should consider having the following insurances and if possible be treated as “must haves” when agents are qualifying and signing on new owners and properties to their rent roles.

• Building insurance 

  • for apartments of Community Title / Strata properties this is typically included with the Strata Levies a property owner pays. In this instance educate the owners to ensure that they have a copy of the policy (or at least information on the policy details) from Strata

• Contents insurance

  • Property owners are not responsible for covering tenants personal possession under their insurance cover however things like curtains, floor coverings, benchtops, air cons (as an example) and other fixtures attached to the property may not be covered under a building insurance and need to be covered. Each insurance policy and its coverage varies so again general advice given to the property owner to ask relevant questions of their insurer here.

• Public Liability insurance

  • A minimum coverage of $10m should be on all properties, no matter the owners personal opinion. 

  • PL insurance is typically under a building insurance however again it would be wise to get the property owner to check that this is the case

  • Some Landlord Protection insurance will have a Public Liability component too (if its a specific cover similar to Terri Scheer or AON etc)

• Landlord Protection insurance

  • In our opinion this is an absolute MUST HAVE for all property owners. This covers a property owner for most of the worst case scenarios that they may face down the track if a tenancy turns sour

  • We’d also suggest that the owner consider a stand alone insurance policy specific for Landlord Protection over the “add on” to a building policy. Clients in the past have experienced gaps in the “add on” policies or exorbitant excesses and costs compared with a stand only specific policy

  • Against whilst we cannot offer specific advice around this our conversation should direct the agent and the property owner to understand and ask the following of their preferred insurer

    • What excesses are payable in the different instances of a claim?

    • What is not covered under the policy?

    • Are multiple excesses payable on one claim (e.g. rent loss, damage, drug lab clean up)?

Notify Owners about Purchasing Insurance

It is a company policy that at least once a year all clients are notified to review their insurance covers and ensure that they are adequately covered on all the above aspects of insurance and their property.

This should be done via a yearly update email / notification to their agent, providing a template that the agent can use to reach out to their owners and provide them with the reminder and relevant information

Owners should be educated that the above 4 aspects of insurance coverage should be considered a “non negotiable” and that a management is refused if the owner does not want to ensure adequate insurance is in place to protect themselves, the property and any potential public liability issue that may arise.

Preferred Supplier

From a legal and ethical standpoint we should never persuade an owner to use a “preferred” supplier however we can certainly point them in the right direction of the landlord specific policy companies out there. The below are typically the main 3 insurers who offer a specific policy coverage for residential landlord protection

• Terri Scheer

• AON

• EBM

Managing Insurance Payments

Like any creditor invoice or cost that we pay on behalf of the property owner it is important that any insurance premium invoices and renewals are paid within the allotted time frame and prior to the due date.

Any issue with an invoice not being able to be paid on time (e.g. unexpected rental arrears, property vacancy etc) should be brought to the agents attention so they can seek funds from the property owner to pay.

For the purpose of ensuring all costs are recorded on their yearly Income & Expenditure it would be best for the property owner to deposit the funds in to our trust so that we can pay on their behalf.

Reference to provide any owner to make the payment into our trust should be the following:

[property address] - Owner

e.g. 25 Smith Street - Owner

Renewal Reminders

It is a company policy that at least once a year all clients are notified to review their insurance covers and ensure that they are adequately covered on all the above aspects of insurance and their property.

This should be done via a yearly update email / notification to their agent, providing a template that the agent can use to reach out to their owners and provide them with the reminder and relevant information