Australian fire recalls the importance of property insurance
A recent forest fire in Australia has caused a lot of damage. After the fire, experts emphasized the importance of insuring property.
The Rural Fire Service says the fire in NSW Tingha Plateau region has been a big hit. Among the areas that were destroyed, there were also many families’ houses. Experts say that housing must be insured against natural disasters.
“If the property is badly damaged or destroyed in a natural disaster, then the investor not only may still have a financial liability, but will also have to call on his or her own resources to recover … a loss of income from the property as well as damaged value of the asset itself,” Mr Fuller said.
He added: “Many regions, right across Australia, have bushfire risk, and that bushfire risk can be at an extreme level or a very high level of exposure, and some of those areas may include the Blue Mountains in NSW, the alpine regions of Victoria, the coastal areas of Victoria.”
There are some elements that should be considered when buying houses from fire zones. The houses that are damaged by the fire area should be made with fire resistant material. Household buyers should make sure that the houses they bought are made of fire resistant material.
“Landlords should ensure that the policy they hold for the investment property covers bushfires in the first instance (not all do) and also be aware of any exclusions,” said Ms Fox-Slater.
“For example, most policies do not provide cover for loss or damage where no flame damage has occurred, such as scorching, melting, heat, smoke, ash or soot ” said Sharon Fox-Slater, managing director of RentCover.
Replacing property may cause high costs if damaged in a fire.
Ms Fox-Slater said. “This can reach into the tens of thousands depending on how long a property takes to be repaired,” Ms Fox-Slater said. A comprehensive landlord policy should provide cover for loss of rent for an extended period … and also have some provisions if the property is destroyed.”
She added: “Insuring an investment property makes good business sense, but making sure that the right cover is in place that provides financial protection for the risks associated with bushfires is also prudent. Bushfires are devastating – don’t risk compounding the misery by being un- or under-insured.”
Sevdenur Demir / [email protected]