With climate change and global warming riding high up the planet’s tail, it is no surprise that cyclone warnings are becoming persistent nowadays. Think about 280 km/h of destructive winds sometimes accompanied with torrential downpours leading to flooding and storm surges. Looking back, Category 5 Cyclone Yasi’s destructive path that shattered lives and caused more than $800 million of property damage left nothing but fear and rue among the far Northerners. This is partly why today, more than ever, raising investment property insurance tips will ensure your protection.
Cyclone Prone Area and Season
An important point to keep in mind though is your risk level and cyclone season of the year. For one, it is imperative to check if the area where you wish to invest in new property is anywhere within the 10km radius of cyclone-prone areas of the Northern Territory as well as in Northern Queensland and North-Western Australia. These areas are known for their scenic and relaxing beachfronts—a haven for tourism and rental properties.
Cyclone season usually occurs in the first week of November leading to the last week of April annually. If you are wise, getting yourself covered at least 3 months before the season begins will give you ample time to weigh on the number of investment property insurance policies. Be reminded that property owners and renters alike must carefully assess their insurance needs prior to the cyclone season to ensure covering all their bases.
Investment Property Insurance Tips
Be wary though of “underinsurance”, a common mistake among many property owners. While a call to a friendly broker may save you ample time, here are some tips to remember before signing an insurance policy with anyone.
- Always take time to re-evaluate your coverage every year.
- Insurance coverage must be based on “replacement value” rather than fair market value.
- Feel free to document everything by taking photos or videos of the whole property, its contents, and other notable objects fixed or detachable to the property.
- Always look high and low when insuring contents. Think: ceiling structure, opulent chandeliers, floor rugs, paintings on walls, and so on.
- Also include replacement cost for contents including common household items.
- Keep records (and photo evidence, if you may) for contents with control or serial numbers. They are of utmost importance when remembering possessions as well as in substantiating losses particularly when flooding or total wreckage occurs.
- Keep record of receipts for expensive items like antique or limited edition furniture—and make sure to have them specified clearly on your investment property insurance policy.
- Shop for insurers in the area. Your insurer in Sydney or Melbourne may not offer what you need for a property in Queensland. If possible, find reliable brokers who can connect you to at least 3 local insurers.
- Do not just focus on premium cost. Choose instead according to coverage level, applied excesses, and other notable items you deem necessary.
When thinking of investment property insurance, this should be always kept in mind—do it long before cyclone season is up. Even when not in cyclone-risk areas, the horrors of climate change and global warming may not work in your favour all the time. Keep your property covered by any unforeseen events, forecasted or otherwise, and contact an insurance broker at the soonest time possible.
Looking for an airtight investment property insurance for your cyclone-prone second home or rental property? Schedule a consultation with Landlord Insurance HQ by calling 1300 815 344 or request a quote online now! We can also tailor an insurance portfolio to satisfy your property’s unique requirements.