With bushfire season starting earlier, and lasting longer, landlords and property professionals need to make sure investments and incomes are better protected should disaster strike, says insurance leader Sharon Fox-Slater.
This comment comes on the back of the New South Wales Rural Fire Service being forced to bring forward the start of its bushfire danger period by two months. And, the news in Queensland is that fire season is also already underway.
Ms Fox-Slater, the Managing Director of EBM RentCover – one of Australia’s leading landlord insurance providers – says now is a timely reminder for landlords and property professionals to understand the risks associated with owning investment properties in fire-prone areas.
“It might be winter, but that doesn’t mean the risk to your investment homes isn’t heating up,” Ms Fox-Slater says.
“The early start of the official danger period indicates we are in for a longer than normal bushfire season, meaning properties are more at risk.”
While bushfires can oftentimes come out of nowhere, and spread crazily, there are a few things landlords and property managers can do to reduce the risk of homes catching alight, including cleaning gutters of leaves and twigs and making sure the garden is kept in check.
However, Ms Fox-Slater says most significantly, those who own or manage investment properties in fire-prone areas should check it’s protected with adequate landlord insurance.
“While you need a defence, you also need a safety net – and that is where landlord insurance comes in,” she says.
“If you own or manage a rental property, now is the time to check you have adequate cover against natural disasters, including bushfires.
“While fire is covered under most household policies, there is sometimes an exclusion period, so if a bushfire occurs within a certain number of days of taking out a policy, cover for this feature is oftentimes void.”
Ms Fox-Slater adds now is the time to make sure investment properties are insured for the correct amount.
Under-insurance is rife among Aussie property owners, with most homeowners insured for less than their home and contents would cost to replace. The Insurance Council of Australia estimates more than 40 per cent of households fail to correctly assess the value of their home and contents.
This means, if a property is to suffer a total loss (for example, if a home burns completely to the ground), the landlord would not be insured for the correct amount to rebuild the property and would ultimately be out of pocket.
“Building costs and standards oftentimes change and the amount you insure a property for should be calculated on the rebuild costs, not of the original purchase price of the property,” Ms Fox-Slater says.
“It shouldn’t be a ‘set and forget’. Each year, you should check your insurance to make sure you are covered for the right amount and that you haven’t forgotten to factor in other expenses such as demolition and debris removal.
“At EBM RentCover, we suggest landlords and property managers engage a quantity surveyor or builder to get an accurate estimate. Because, losing your home is tragic enough without the added pressure of financial hardship.”
Cover for fire, including the impact of bushfires, is an automatic inclusion in all EBM RentCover policies.
Now you know the importance of landlord insurance, knowing how to respond in times of disaster makes the claims process easier.
This is what to do if a home is impacted by a bushfire:
- If safe to do so, do a safety walkthrough and take steps to prevent further loss or damage
- Contact your insurer as soon as you know the property is impacted so they can advise next steps
- Grab a notebook and camera and capture the damage
- Seek quotes for repairs
- Submit an insurance claim at the earliest opportunity
