Overview and key points
Arranging appropriate insurance for your portfolio could be one of the most important things you do.
Key takeaways
Property management can be rewarding – it can also be incredibly complex
Understanding the needs of your clients is key to securing the cover you need
Obtaining the right advice will optimise your investment and minimise your risks
Be mindful that the minimum coverage required by law may not cover all eventualities
Based on our experience in working with property managing agents, we have pulled together the top 5 challenges they face. This is the first of a series of advice pieces we are sharing for managing property agents.
1. Complicated insurance products
Property managers need to assess the exact needs of their clients (landlords, tenants, property owners and lease requirements) to match them with the appropriate insurance. Understanding the different cover types, exclusions and limits requires significant knowledge and experience.
2. Changing legislation and regulations
Staying on top of the frequently changing local laws and regulation can be difficult. Property managing agents need to ensure that the policies they arrange for clients are compliant with building codes, tenant protection laws, and insurance requirements imposed by mortgage lenders or government authorities.
3. Risk assessment and pricing
Agents may struggle to gather the information needed to assess the risks associated with a property such as the condition (e.g., building age, location, construction materials) and tenant behaviour (e.g., risk of damage or liability). Misjudging these risks can result in overpaying for cover or insufficient protection.
4. Policy exclusions
Some insurance policies may have exclusions that are not immediately obvious to the property manager or their clients, such as damage from floods, earthquakes, or vandalism. Property managers must ensure that their clients are aware of these exclusions and arrange supplemental insurance where needed.
5. Insufficient coverage
Clients may opt for the minimum coverage required by law or lenders, which might not fully protect the property in the event of significant damage. Ensuring adequate coverage can sometimes be challenging, particularly when clients are reluctant to pay higher premiums for comprehensive protection.
Click here to read the full 12 Challenges facing property managing agents.
Ensuring you have an insurance programme that is resilient, relevant and responsive to protect both your clients and your business is critical.