By BRIDGET COOK
BAD tenants have proved costly for local property owners, with new figures revealing that Casey recorded the highest number of landlord insurance claims in the state.
RACV Insurance released figures this week that showed 114 claims were lodged by Casey members with landlord insurance last year, costing an average of $6500 per claim.
Malicious damage by tenants and rental defaults were the most common reasons for claims.
Frankston recorded the second highest number of claims with 97, and Cardinia third with 47.
However First National Real Estate group division manager for the Casey Cardinia region Allison Holzer said the best way to avoid claims was during the tenant selection phase.
“It is going to happen in any area and there are risks with any tenants,” she said.
“But the tenant selection process is key to ensure you get a high-quality and low-risk tenant.
“It’s about having a qualified and knowledgeable agent you can place a good tenant in the house from the start.
“To be honest, I’m surprised by these figures as I haven’t seen it to be a huge problem.”
Ms Holzer said there is always a risk, though, so she advised all landlords to have insurance.
“It’s a must,” she said.
“You can even have a really quality tenant, but sometimes things in life can go wrong that are unexpected.
“There is more financial struggle these days and sadly often rent is one of the first things affected when people start to struggle.
“There are risks with any investment, so use the tools available to protect yourself.”
RACV manager personal insurance Phil James with the average claim in Casey costing almost $6500, there could be considerable financial impact to landlords.
“Last financial year RACV Insurance paid out an average of $4323 for 380 claims for malicious damage and an average of $3341 for 370 incidents of tenants defaulting on rental payments but remaining in the property,” he said.
“RACV Insurance also paid out an average of $3087 for 213 claims for renters defaulting on rent when vacating the property without notice.
“Other common claims included storm damage, water damage to investment properties, burglary and fire.”
Mr James said the RACV data showed it was essential for landlords to protect their investment.
“In addition to tenants causing damage, landlords also must consider the cost of natural disasters, such as storms, floods and fires and how not having adequate insurance cover could seriously hurt their investment return,” he said.
