ALL FLAMES AND FLOODS ARE NOT EQUAL – WHY LANDLORD PROTECTION INSURANCE IS SO IMPORTANT.
We have all seen the Insurance advert on TV with the curtains burning, the big gash in the wall and the red wine spill, I am certain we have all had accidents like this in our homes at some point and it has caused us some stress. Unfortunately, all insurance policies are very different and you will not know until you try to make a claim.
First of all let's look at the definitions that are used for common incidents related to fire, the policy term and conditions will outline what’s covered and what’s not.
18 months ago I had an incident at my home where my E-Bike was plugged in charging and the Lithium battery exploded and I very nearly lost my home, we were home at the time and that saved us but then the was the insurance claim and all that was involved, this is where you learn all about the different terminology used by insurance companies.
This is what I discovered during my claim:
Arson – is the act of intentionally and maliciously destroying or damaging property through the use of fire.
Ash – is the powdery residue left after the burning of a substance.
Burning – means on fire.
Charring – means to burn or be burned partially so as to blacken the surface.
Explosion – is a rapid increase in volume and release of energy in an extreme manner, usually with the generation of high temperatures and the release of gases.
Fire – means the production of light and heat by combustion or burning; a fire must produce a spark, flame or glow.
Flame – is a hot glowing body of ignited gas that is generated by something on fire.
Melting – means the action or process of liquefying due to heat (e.g. a hot pot causes a laminate benchtop to melt, or an appliance overheats and its casing melts).
Scorching – means damage caused by heat, not flames (e.g. holes burned in carpet by a cigarette or a piece of wood falling from the fireplace); to become marked or change colour because it is affected by too much heat.
Smoke – is the grey, black or white mixture of gas and very small pieces of carbon that is produced when something burns.
Soot – is a black powder composed mainly of carbon, produced when things like coal and wood is burned.
Like with all Insurance claims, we hope we never have to deal with a claim but getting good advice is the first port to call, providing a details report with dated photos and keep to the facts at all times.
The unimaginable will at some stage happen to some investment properties, Flood, Bushfire, Electrical Fire, Unattended candles, Lithium batteries exploding, Kids playing with lighters, Kitchen fires are probably the most common we see.
My view on landlord Insurance is as a safety net if the property is consumed by fire or flood which happened in Elanora just 1 year ago, an unprecedented flood occurred and many homes were left uninhabitable including rental properties. Having the correct Landlord Protections Insurance meant some landlords were fortunate enough to have cover for up to 52 weeks of rent paid to them.
You unfortunately still have a mortgage to pay, insurance, rates and the like but no rent coming in so this landlord insurance is in my mind a no-brainer, checking the inclusions on your policy is very important. Some will offer this and some won't, I believe it is worth the peace of mind knowing you have that as a backup. You would not drive your car without Comprehensive car insurance.
ANGELICA STREET LOOKING DOWN TO 19TH AVE ELANORA FEBRUARY 2022.
All of these homes were either owner-occupy or leased, this was a catastrophic event and some homes are still not habitable. Again, what is the definition of flood, water damage, ingress of water and, what happens with the mould issue that will result inevitably?
TENANT DAMAGE – ACCIDENT, NEGLIGENT OR MALICIOUS.
As far as tenant damage is concerned, it’s up to each company that issues the policy as to what is covered and why it is so important to carefully look at your inclusions and exclusions and take out a policy that suits your needs, look at the excesses charged and if the policy looks at each incident as a stand-alone or the claim as a whole. Some companies will use the bond as an excess, some will have an excess on each part of the claim, and you need to do your homework.
If you were to need to make a claim for tenant damage, negligence or malicious, Remember your Ingoing condition report and regular routine inspections with a dated detailed report including dated photographs can be your best friend if such an incident occurs as they will form an ongoing record of the condition of the property and its care and maintenance.
The bond will only go so far and good management by a professional Property manager can save you time, money and your sanity.