Updated: Sep 21
It's easy to read stories like this and think insurance companies are evil and will avoid paying out any chance they get, but the truth is they have to honour the terms of the contracts they enter into with their customers.
AFCA recently upheld a decision by Commonwealth Insurance to deny a claim where a tenant's cannabis equipment caused an electrical fire at a rental property. Unfortunately this claim would have been paid if the home owner had taken out cover for Malicious Damage by tenants, an optional extra that probably would have cost less than $100 a year.
It might not seem fair, but insurers can only pay claims where the contract allows them to otherwise they'd be paying out more than they're collecting in premium.
Landlords Insurance claims often have out of pocket costs for the property owner from maintenance and cleaning costs that aren't usually covered, so I always encourage clients to take out as much cover as possible unless there's a personal relationship with the tenant.
There are plenty of times when we love to save our clients on their annual premiums, but cutting cover to save a few bucks is not something we'd recommend. We won't sell you things you don't need, but we will give you options so you can make an informed decision from the outset rather than finding out what coverage you could have had when it's too late.
If you'd like to work with someone who will give it to you straight - get in touch!
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