Trustee and Tank account executive finalising landlord insurance for an SMSF-owned rental property

SMSF and Trust-Owned Property Insurance

The cover is ordinary landlord cover. What changes is the name on the policy. We insure fund-owned and trust-owned rentals in the trustee's name, with the lender noted, and manage them as one portfolio.

ATF

The insured is the trustee, as trustee for

$1.4-7.1K

Recent annual premiums

Point of contact across every trust

Recognition

THE SHORT ANSWER

A property owned by an SMSF or trust is insured under an ordinary landlord policy. The policy must name the legal owner, the trustee as trustee for the fund or trust, with the lender noted as an interested party. An insured-name mismatch is what causes problems at claim time and at settlement, so the name has to match the title exactly.

Tank arranges landlord cover for property held by self-managed super funds, bare trusts, holding trusts and family trusts across Australia, including dual key and dual occupancy properties and small blocks of units. Certificates of currency issue in the trustee's name for the lender and the auditor, and portfolios held across several entities run through one point of contact. Nothing on this page is tax, superannuation or structuring advice, or personal financial advice; how the fund or trust is structured is a question for your accountant or SMSF adviser.

01WHO IS THE INSURED

Six Things That Get the Name on the Policy Right

Trustee, fund, member, holding trust, custodian. The policy has to name the one that actually owns the building, and note the one that lent against it.

The Trustee Is the Insured

A super fund or trust doesn't hold title; its trustee does. The policy names the trustee, individual trustees by name or the corporate trustee company, as trustee for the fund or trust. That is the entity with the insurable interest and the one that has to be paid at claim time.

Not the Member, Not the Fund Alone

A policy in a member's personal name insures someone who doesn't own the building. A policy naming only the fund names something that can't hold property. Either mismatch surfaces when a claim is paid, when the lender checks the certificate, or when the auditor reads the schedule.

Bare Trust and Holding Trust

Where the fund borrowed to buy, the property usually sits in a separate holding trust (often called a bare trust) with its own trustee company, under a limited recourse borrowing arrangement. The holding trustee is the legal owner and the name on the policy, sometimes with the fund trustee noted alongside it.

The Lender as Interested Party

The lender, or its custodian under a limited recourse loan, is noted as an interested party on the policy and appears on the certificate of currency. Lenders check this at settlement and again at refinance, and a certificate in the wrong name is a settlement delay.

Match the Title Exactly

Use the trustee's full legal name and the fund or trust name exactly as they appear on the title and the trust deed, including the ACN where the trustee is a company. Abbreviations and missing words are what tend to get certificates rejected.

Liability Attaches to the Trustee

Legal liability as owner sits with the trustee, so the liability section of the policy should name the trustee too. Where a block of units is held in a fund, the liability limit should reflect the whole holding, not one unit.

SMSF PROPERTY QUOTE

Get a fund-owned rental insured in the right name

Tell us the trustee and fund names as they appear on the title, the lender, and the property. We'll come back with terms and a certificate of currency in the trustee's name for the lender and auditor.

Open quote form

02PORTFOLIOS ACROSS SEVERAL TRUSTS

One Point of Contact, Whatever the Structure

An investor who holds property through a fund may also hold property elsewhere: the fund's property, the family trust's property, sometimes a bare trust for each borrowed purchase, and a house in a personal name from before the structure existed. Each has a different insured, a different lender and often a different insurer, and each renews on its own date.

We run that as a portfolio. Renewals are tracked and aligned where it helps, certificates of currency are issued on request in whichever trustee's name the lender or auditor asks for, and a refinance or a new purchase slots into the same file rather than starting from scratch. When a claim lands, the call comes to us first.

The same applies where a fund owns a dual key, a dual occupancy or a block of units. The two-dwelling or multi-unit side of the placement is handled the way our dual occupancy and block of units pages describe; the fund only changes the name.

What it costs: Holding a property in a fund or trust generally doesn't change the premium; the property does. Recent Tank placements for fund-owned and trust-owned rentals have landed between approximately $1,400 and $7,100 a year. Your property will be rated on its own details. See the landlord insurance cost guide for the wider picture.

WHAT TO SEND US

Six things that get a fund-owned property quoted quickly

Title and trust names

The trustee's full legal name (and ACN if a company), the fund or trust name, and how the owner appears on the title or the contract of sale.
The loan structure

Whether the fund borrowed, the lender's name, and the custodian or holding trustee where a limited recourse loan applies.
The property

Address, number of dwellings, year built, construction, rewiring and replumbing dates, and the building sum insured on a rebuild basis.
Occupancy and rent

Whether each dwelling is tenanted, the weekly rent, and whether a property manager is in place.
The date it has to start

Settlement date or renewal date, so the certificate is ready when the lender or the auditor asks for it.
The rest of the portfolio

If the fund or your other entities hold more property, tell us. Renewals can be aligned and certificates issued on demand across all of them.

CLIENT SUCCESS

Fund-Owned and Trust-Owned: How These Rentals Actually Get Placed

Recent Tank placements, anonymised. Premiums are approximate gross figures and reflect each risk at the time - not a guide to future pricing or turnaround.

01 Four flats on one title, owned by a self-managed super fund

A self-managed fund in the NSW Hunter region owns a single-level building of four residential flats, brick and tile, around 50 years old and fully renovated in 2016, on one Torrens title with no strata scheme. The trustee company needed building cover on a replacement basis of around $930,000, loss of rent and $20 million public liability, all attaching to the trustee as owner.

The owner was specific that the policy had to issue in the trustee's full legal name and could not lean on strata definitions, because there is no owners corporation. The risk was presented exactly that way, as a non-strata residential block held by a corporate trustee.

THE RESULT:

Placed with Castle at approximately $3,400 a year with a $2,000 excess, in the trustee's full legal name.

02 A dual key property held by a fund's holding company, two policies replaced with one

A company set up to hold a self-managed fund's property portfolio owned a dual key property west of Brisbane: a four-bedroom unit and a one-bedroom unit under one roof on one title, insured until then under two separate policies. The combined rent was around $1,050 a week, with a building sum insured of $700,000 and $50,000 of contents across both.

The risk was referred to a market that writes two dwellings on one policy, and the named insured on the documents was corrected to the holding company before the policy was issued, so the entity on the policy matched the entity on the title.

THE RESULT:

Castle wrote both units on one policy at approximately $2,600 a year.

03 A bare trust purchase settling in two weeks, tenant still to come

An investor buying a 2005 brick veneer house west of Melbourne through a nominee company as trustee for a bare trust, with a custodian lender to be noted, needed landlord cover in place for settlement in a fortnight. The building sum insured was $405,000 with $10,000 of landlord contents.

With no tenant yet in place, rent default, theft by tenant and loss of rent were deliberately left off at inception, to be added once a tenant signed. The investor already held another landlord policy with us, so the excesses were matched to it.

THE RESULT:

Placed with Hutch at approximately $1,400 a year, certificate issued in the trustee's name for settlement.

04 A five-unit block in regional NSW, bought by a super fund at a flood-mapped address

A couple's self-managed fund, through its corporate trustee, was buying a 1970 double-brick block of five units in regional NSW, with settlement a month away. Building cover only, with a sum insured of around $1.6 million, and the address sat in a mapped flood area that narrowed the market.

The risk went to the market that rates flood-mapped addresses on their details, the sum insured was corrected upward from the vendor's outgoing policy, and the start date was aligned to the day the vendor's cover ended.

THE RESULT:

CHU covered the block at approximately $4,100 a year, with the certificate filed for settlement.

Premiums and outcomes described are specific to each client and indicative only. Your own terms will depend on your circumstances and the insurer.

SMSF PROPERTY FAQS

Common Questions About Insuring SMSF and Trust-Owned Property

01 Who should be the insured on an SMSF property?

The trustee, as trustee for the fund. If the fund has individual trustees, the policy names them as trustees for the fund; if it has a corporate trustee, the policy names the company (with its ACN) as trustee for the fund. Where the property was bought with a limited recourse loan and sits in a holding or bare trust, the holding trustee is the legal owner and goes on the policy, sometimes with the fund trustee noted alongside. The name should match the title exactly. For how the structure itself should be set up, check with your accountant or SMSF adviser; we make sure the policy reflects whatever structure you have.

02 Can the fund pay the premium?

Whether and how the fund pays is a question for your accountant or SMSF adviser, not for us. From our side, the invoice and the certificate of currency issue in the trustee's name so the paperwork lines up with the title and the fund's records.

03 Do I need a separate policy for each property?

Usually each property has its own policy, because each address is rated on its own details and often sits with a different insurer. What you don't need is a separate broker or a separate renewal calendar for each one. Tank manages fund-owned and trust-owned property as a portfolio: one point of contact, renewals tracked and aligned where it helps, and certificates of currency issued on demand for the lender, the auditor or a refinance. Properties held across several trusts or entities are handled the same way.

04 Can you insure a dual key or dual occupancy property held in an SMSF?

Yes. The cover is ordinary dual key or dual occupancy landlord cover, both dwellings declared on one policy with the sum insured set across both. What changes is the insured name, which has to be the trustee as trustee for the fund, with the lender noted. We placed exactly this for a Queensland fund's property-holding company, replacing two separate policies on a dual key property with one in the company's name. Our dual occupancy insurance page covers how the two-dwelling side of it works.

05 How fast can you arrange cover for an SMSF settlement?

With all the information in hand, the trustee and trust names as they appear on the contract, the lender and custodian, the address, construction and rebuild value, and the occupancy, cover can be arranged in as little as 24 hours. Usually it takes 48 to 72 hours. Send the settlement date with the enquiry so it's prioritised, and the certificate of currency in the trustee's name follows as soon as the policy is bound.

06 How much does SMSF property insurance cost?

Holding a property in a fund or trust generally doesn't change the premium; the property does. Recent Tank placements for fund-owned and trust-owned rentals have landed between approximately $1,400 and $7,100 a year: a single house bought through a bare trust at the low end, and a three-unit block on the NSW mid-north coast with loss of rent and rent default at the high end. Sum insured, location, construction and age, the number of dwellings and the excess move the figure, so treat that as a guide. Your property will be rated on its own details.

07 What happens if the policy is in the wrong name?

Three things can go wrong. A claim can be paid to a party that isn't the owner, or held up while the insurer sorts out who the insured actually is. A certificate of currency in the wrong name can be rejected by the lender at settlement or refinance. And the fund's auditor may query an asset insured in a member's personal name. All three are avoidable by asking the insurer to endorse the policy into the trustee's correct name before a loss, which is normally a quick change. After a loss the insurer decides how to treat the mismatch, so fix it now.