When you hire a property advisor, there’s an assumption built into that decision: you’re getting expertise, guidance, and some level of protection if things go wrong. But how much of that protection actually exists—and where does it break down?

In this episode, we unpack the role of Professional Indemnity (PI) insurance in property advice, and what it really tells you about accountability, risk, and the quality of advice you’re relying on.

Joining us is Polina Kesov, an insurance specialist with over two decades of experience working behind the scenes on claims, risk, and policy structures. Together, we explore the blurred line between “execution” and “advice,” why many buyer’s agents and property investment advisors may not be properly covered for the services they’re offering, and how something as simple as a policy exclusion can leave both advisors and clients exposed.

We also dive into why claims in property advice are so rare—not because everything is working, but because proving loss is complex, delayed, and often not actionable. From cookie-cutter strategies and disclaimers to the growing use of AI in advice, this episode breaks down the structural gaps that most investors never see until it’s too late.

If you’re relying on professional guidance to make high-stakes property decisions, this conversation will change how you assess risk. Because in property, it’s not just about whether the investment performs—it’s about what happens if the advice behind it doesn’t.

Episode Highlights

04:17 — Can Property Advisors Actually Get Covered?

06:01 — What Makes a Property Advice Claim Valid?

09:25 — Repeat Offenders and the Lack of Transparency

11:42 — Marketing Hype vs Where Advice Crosses the Line

16:10 — How Claims Impact Insurance Renewals

21:01 — Real Claims Against Buyer’s Agents Explained

24:55 — Why Insurers Act as Hidden Risk Partners

27:52 — How to Choose the Right PI Insurance Cover

29:58 — What a Certificate of Currency Really Tells You

31:44 — Why You Must Verify Advice Scope in Writing

33:40 — Multiple Claims: A Major Red Flag

35:45 — Licensing Gaps and Disclosure Obligations

37:57 — AI Advice: Who’s Liable When It Goes Wrong?

39:38 — What Questions Should You Ask an Advisor?

41:14 — Why Property Advice Claims Stay So Low

47:47 — SMSFs and Trusts: Where Advice Gets Risky

50:14 — Vicarious Liability: How Risk Spreads Fast

53:22 — Key Takeaways Every Investor Should Know

About the Guest

Polina Kesov is an insurance advisor with over 20 years of experience working alongside Australian businesses on risk, claims, and insurance coverage. Specialising in professional indemnity, she has a deep understanding of how advisors are assessed, insured, and held accountable when things go wrong.

Throughout her career, Polina has worked closely with professionals across the property, finance, and advisory sectors, giving her a unique, behind-the-scenes perspective on how claims are evaluated and where systems succeed—or fail. Her expertise extends beyond policy setup into real-world outcomes, including how insurers interpret liability, manage disputes, and determine whether a claim is paid.

Known for her practical, no-nonsense approach, Polina is passionate about improving awareness around risk and helping both professionals and consumers understand the fine print that often gets overlooked. Her insights offer a rare look into the mechanics of protection in the property industry—where assumptions don’t always match reality.

Connect with Polina

• LinkedIn - Polina Kesov
• LinkedIn - Insurance Insights Australia
• Website - Insurance Insights Australia
• Instagram - Polina Kesov

Resources

• Visit our website: https://www.theelephantintheroom.com.au
• If you have any questions or would like to be featured on our show, contact us at:
• The Elephant in the Room Property Podcast - questions@theelephantintheroom.com.au
• Looking for a Sydney Buyers Agent? https://www.gooddeeds.com.au
• Work with Veronica: https://www.veronicamorgan.com.au
• Looking for a Mortgage Broker? alcove.com.au
• Work with Chris: chrisbates@alcove.com.au

Enjoyed the podcast? Don't miss out on what's yet to come! Hit that subscription button, spread the word, and join us for more insightful discussions in real estate. Your journey starts now!

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See you on the inside,

Veronica & Chris

TEITR 434 : Polina Kesov

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CB: Well, I think that's kind of where we wanna start. Thanks for joining us. I mean. Obviously PI insurance or professional indemnity insurance is a big sort of,~ uh,~ uh, something that we need, right? It protects, you know, people when they take out a, a professional. I, I always had a belief that, you know, you gotta be really, buyers beware in the property market.

But then a lot of people engage property advisors, buyer's agents, and so like, is what protection do they need to have and do they have it? And, you know, what does it, who does it really protect?

Polina: Absolutely. That's a really, really good question. This is what I'm gonna start from. When a consumer goes and gets a professional to help them, it's never in front of their mind to check if that professional is in insured. They're still looking for credibility on the market. They're looking for, you know, our longevity on the market and what kind of,~ uh,~ solutions they can provide them with.

Insurance in place. Real estate professionals that are licensed or working for a licensee must have it by law, must have, for example, in New South Wales, at least 2 million in cover. ~Um. ~Valid all the time. Does it mean they get that? Well, that's a question, right? Because I have seen all sorts of professionals in 20 plus years in my career.

But for a consumer that's really important because if something goes wrong and they suffer a financial loss and they go after that advisor that has given them possibly an incorrect advice, and if there's no professional indemnity insurance in place, how are they gonna recoup their losses? It's not always easy to sue somebody and know that they've got assets that they can come after.

It's not that expensive versus the amount of coverage that it keeps you.

VM: So I've been hearing stories though that not all property investment advisors or buyer's agents or both,~ um,~ can actually get PI insurance. So, so I guess what. What does it tell you about an advisor if they either can't get it or choose not to get it and you know, how should interpret consumers interpret that risk?

Polina: Absolutely. Look, it's not a matter of not being able to get it. Anyone in that profession can get it. The problem is there's only one or two products on the market in Australia currently. Not a lot of property investment advisors. Know about that. Also, a lot of buyer agents are doing pure buyer agency, or sometimes they do a hybrid property investment advice and buyer agency.

So anyone can get it if they need it. Yes, it's a little bit more costly than just getting a traditional professional indemnity for real estate professionals. But we provide a specific product, for example, that strictly states that it is. Including property investment advice, and then all overriding activities of a property professional.

CB: But from a consumer's point of view, there'd only be certain things. Things that you could come back and say, you know, I'm not happy with that. Like, you can't go in and say, Hey, you told me to go up by 40% and it went up by 4%. Like, or it went down. Like you can't sue them for, you know, I guess forecasting or what Can a consumer sort of go to a buyer's agent and say, Hey, you gave me bad advice.

Like what, what are some of the things consumers could do?

Polina: Sure. The reality is anyone can say anything, but they have to substantiate their claim, and it has to be a pretty good evidence to show that the advice that they've received caused them a loss. Right, and from what I know dealing with lots of property professionals on a day-to-day basis is that most would say you still have to talk to your accountant and your financial planner, your lawyer, get all the, um,~ um,~ ducks in a row so that you know, you're definitely making the right choice.

If they don't, it's just an assumption. Well, the insurer that represents the property professional, we'll come back and go, we believe we've done all the right things. He's the backup of all the information that we've provided.

CB: ~um. ~I dunno. Let's say I'm, you know, off the plane, I was, you know, spruiking off the plane for like 10 years and I know that, you know, the performance of those apartments, for example, have been really poor. All the evidence proves that, but I'm still able to sell them saying, Hey, you know, things can always change.

Polina: Remember, it's only a projection that they provide. It's not a definite guarantee. That's how they come around it. But if, um, if they haven't given enough due diligence to show the client that there's possibility of market going up or down and, you know, the cashflow might vary and all the other things that may vary, well then they're exposed because it's not good enough just to say, Hey, you should buy this property because you're gonna make a lot of money.

Right? They're gonna back it up with a lot of data. And that's where property investment advisors are strong in, I believe, by providing a lot of data for a client to make an educated decision. But it doesn't stop the market from changing and for the advisor to be exposed, even to fight it, um, in Cork and say, no, I was right.

That's not good enough. It works perfectly when there's a lot of backup of information and analysis for the client to go, okay, I'm more comfortable yet, things can still go wrong. So that's, you've got a security blanket called professional indemnity insurance.

VM: So if an advisor has had claims made against them, how visible is that to the public? And if something is settled out of court, is there any way for a client to know they might be dealing with a repeat offender?

But otherwise, unfortunately, there's not such a register. ~Um, ~more often or not, these type of claims end up in Africa. Which is the Oman Ombudsman for Financial Services, and then they can publish and blacklist others. But at the end of the day, we are operating as a consumer on a lot of trust.

CB: And so there's no like, ~um, ~they can basically provide research. To back up their claims. So as long as they're providing a very good, well documented process that Suppo supports their argument, plus they've got all the disclaimers in there, that's sort of enough to protect them. Right? And even if they,~ um,~ you know, if they believe their strategy doesn't work out for the consumer,~ um,~ and they might even upfront know that, you know.

So like they, they could have been other options for them to do, but they've decided to pursue this strategy. ~Um, ~there's no real protection for the customer around the performance of it, if it's documented well, right.

But it still happens unfortunately. But it, that's why,~ um,~ property advisors rely on other professionals to give other parts of advice. So accountants, financial planners, you know, those that have the special expertise to say, is this particular scenario best for the client? But otherwise, look, documenting it is the best.

Like that's a lot of the, the pitch. But then when they come to them, they then overlay it with, oh, I can build you wealth through accelerating your wealth through some type of strategy. And I can buy, like, I'll do this and I'll do that and I'll get equity out and I'll buy another one and use this structure. So they move away from like, Hey, this is the type of property that would make a good asset to come join and follow my process that, you know, I've done for many clients. And ~um, ~so how does this is because this is skirting into financial advice, like where's the line where a lot of these property investment advisors really should be stopping and where's the line, which, you know, is very clearly in financial advice, territory

or accounting or tax.

Right. And they're not going into that financial planning advice because that's not the area of expertise. The area of expertise is property and property only. So anyone that goes outside of that scope, unfortunately they're in danger of giving advice that's not gonna be covered. And then it's a danger for the consumer as well going, well, they're not a financial planner.

Why They're giving me all this advice about building wealth. You can talk about property being one of the vehicles for building wealth, but it's not a guarantee that that's gonna make you somebody that just drives Ferraris.

I mean, it, it, you can do all sorts of things with numbers. So the very fact that you do this documentation, does that sort of protect an advisor from, the bigger or reduce their risk, I guess, of, of. Having a successful claim against them and in increase their ability to defend a claim,~ um,~ to say, well, look, you know, I'm sorry you lost money, but, oh, I did have a disclaimer saying that the market's changed and, and look at all this background work I did.

You know? Yes. It didn't work out because markets changed and I, and you know, as it turns out I was wrong. But, you know, I don't have to suffer the consequences. 'cause I've done, I've been, I've been a good boy and or girl and I've, you know, I've shown my workings. ~Um. ~I'm being cynical here, but I feel like that's sort of

what you're saying.

Well, that's, you know, on an individual basis, not showing anything at a time of claim is a big problem for an advisor showing enough reduces their risk, and then the insurers would look into how well did they look into it, what other professionals did they liaise with to go, Hey, is Mr. Smith or Mrs. Smith or a couple.

Was suitable for this type of purchase, and how likely were they going to lose the money? How likely were they gonna suffer any loss? But it's still a very gray area, so that's why we call it a security blanket. It's not a full on protection because at the end of the day, the decision is also with the purchaser, you know, and they've gotta take some accountability for the decisions that they're making.

Polina: Absolutely. Anything can happen depending on the claim, the size of the claim, and the reason why the claim is successful. If it's an advisor that completely didn't follow the process, just didn't do the right thing by the client, the reality is they're unlikely going to have a renewal term offered by the insurer because no insurer wants somebody who keeps very poor paperwork and poor process if it's just,~ uh,~ a matter of a mistake.

So it depends on a lot of factors or the access. A higher access is imposed on at renewal, but it doesn't mean that the advisor can't be insured anymore. It's only when they completely haven't followed the process or completely negligent or committed fraud if the fraud is committed. There's never,~ um,~ a renewal offered, and then they're pretty much blacklisted by their insurer.

And because there's only one or two products on the market for that or for property investment advisors, that's a big danger sign because how are you gonna get insurance? How are you gonna continue operating?

CB: So, I mean a lot of the, um,~ um,~ property buyer's agents, I mean, in the owner occupier space, it's a bit different, right? Like that's a helping people buy a home and then even them buying, you know, you've gone to a local specialist in a pocket of Australia from a property investment advisor and. I wanna buy an an investment property in the, in west of Sydney or something.

Because they're not really, you know, besides Yes, it's all documented. Yes. They've got great research. Yes, they've got great forecast. Yes, they've got all the disclaimers. But are they protected from an advice point of view?

Polina: So the consumer is protected. If they can show the loss, they would be protected under the policy. Is the advisor protected? Yes, because they've purchased the property and if there's any problem as a result of their activities, that's when the claim kicks in. Yes, of course. The insurers and their lawyers would then sit down with the insured being the property investment advisor and go, okay, why are you funneling everyone into the same, why is your process just one way?

VM: What, what have you noticed in terms of claims like. As it are there many, is there increasing? So there's not many.

Polina: Not many. Not many at all, which is a very fortunate situation to be in for our professionals, property professionals, because there's not a lot of claims in the advice space. There's a lot of claims on the real estate side. Even buyer's agency side has more claims. Property investment advice, not so much.

And the reason being is what I keep referring to, it's not easy to substantiate a claim. You have to really show that the advice was so negligent that you've lost a large sum of money. And you also have to show that there's not way of recouping it, because at the end of the day, you may hold the property for a bit, sell it, and still not make a loss if you haven't made a loss.

Polina: in a buyer's agent space, the claims are very, um,~ um,~ interesting. I say it's usually comes down to my buyer's agent told me that the, the floor is tiled. It wasn't, it was vinyl and they didn't do their due diligence, right? And now I've gotta put this tiled floor because I want to rent this property, or you know, or I can't live in this condition.

So it comes down to what I call negligent advice. Just something that the buyer agents don't really drill into and look for. ~Um, ~but they're very rare type of claims. It's again, very difficult because with buyer's agency, like Chris said, a client comes and says, I wanna buy in this particular pocket of Sydney.

This is my budget and I only want a house. I don't want a townhouse or a unit. The buyer's agents deals with those instructions. They're not really going inside.

Now that's a big gray area, isn't it?

Polina: Absolutely. And the examples you've described are leaning towards advice. And if you're not covered for advice, then you're just simply not covered. And if somebody makes a claim, you are exposed. And we are seeing that a lot because,~ um,~ I don't know if the market has shifted or our professionals have pivoted a lot in the last sort of 12 to 24 months, but a lot are now buyer agents and property investment advisors, and it's so blended they're not even sure which service they're providing one or the other.

VM: So Paulina, when I first met you, and because I do have a broker that is not you, but,~ um,~ when I first met you, we had this conversation and I did go to my broker and I did check on that. So I am covered for advice, but, and my business is covered for advice. But yes, that's a very important distinction. And the, the problem is that people need advice,

Polina: investment advice, so very different investment advice versus if you're selling to mom and dad for to buy their home. And you're giving them advice. It's not investment advice. It's the investment advice that's sort of a highlight in a lot of policies that may be excluded.

You know, are, are they actively pushing for better processes, documentation, and client care to reduce risk?

Polina: Absolutely. So my policies would offer a free review of your contract. Your processes. That's something that a lot of clients don't know. So you being a professional can ask the insurer, look, can you have a look and make sure that I'm compliant, that I'm not using the wording that's a bit ambiguous. ~Um, ~and can lead to a claim if such was to happen.

And they'll, they'll do it for free as part of your policy. It's a very underutilized service. That a lot of our clients are not even using. We all always let them know that it's available. It's in black and white when we send the paperwork, but it's not really utilized. I highly encourage professionals to actually utilize it because if you're gonna go to a lawyer, it's gonna cost you a lot of money for them to give you that advice.

So that's something to know and also very important things to consider. ~Um, ~and I talk a lot about that with my clients. Access under the policy. So you've got the level of cover that should never be less than $2 million, and we are seeing a lot of professionals just buying a million dollars because they wanna save money.

A big no-no, in my opinion, not in today's market. Also access, make sure that it's affordable. Because you can have a few claims throughout the year, and if the access is say 10, $15,000, it's not that easy to just part with that amount of money towards your claim. So make sure that it's affordable, maybe $5,000.

You have started working, don't be exposed because a person can come to you two, three years down the track and go, Hey, Veronica, you, you sold me this house. You gave me advice back then, and your policy has not been, you know, in place at that time. You can be exposed. So we call it,~ um,~ you know, unlimited retroactive cover or specific date that you note on the policy.

So those finer details. Super, super important and look at the conditions. Like I said at the beginning, no one reads the fine print. Always read the fine print. But also rely on brokers. It's not a policy that's easily available off the internet. Yes, you can go to a few different platforms and buy one, but they're not really gonna give you advice.

~Um, ~Um, so you're not sort of limiting yourself and you don't have problems down the track. But otherwise, look, you should rely on your expertise and what you know for the clients. Let brokers do their job and actually do it. Not just give your price, but go, these are the differences. Make you decide what's better for your business today, because your business today is very different to how it was before and it's certainly gonna be different how it is in 12 months or 24 months count, because lots of laws are changing, lots of things are coming into play, so we just need to make sure fine print works for you.

Or the other way around. You could connect with me and access all of the tools that I've created to help you make better property decisions at Veronica Morgan dot com au. And there you'll find resources for first home buyers, details about my buyer's agent mentoring program. You could connect with my Sydney based property management and buyer's agency teams, Australia wide vendor advocacy.

Or ask me for introduction to the small group of buyer agents that I would personally recommend across the country. That's Veronica Morgan dot com au.

If you're considering a property move, which is buying your first time, upgrading, renovating, or investing, the team here at Alcove would love to help you think through your decision and get the finance right.

Please go to cove.com au to reach out.

Polina: Absolutely. So anyone can request from any professional what's called a certificate of currency. What that validates is that the insurance is current. That certificate of currency would have a date, not the date of the policy. It would have the date of when it's issued, and you wanna make sure that it's as current as possible.

So if somebody got it last week, it's okay. If somebody got it eight months ago, ask them for an updated one. It's a document that the insurer can issue at any time, free of charge to the professional so they can show to anyone they're dealing with. Whether it's an individual or a business to go, yes, I'm insured.

And they're using buyer's agent services, great. But if it says,~ um,~ I don't know, rental agent, but they're using them as buyer's agent, well, they need to double check that and go, hold on a second. Why does this say,~ um,~ this is stated, that's the only document. There's no register, not something that's available in Australia.

It has to be requested from the professional, and they should be able to provide it in the blink of an eye, to be honest.

VM: They should, but you mentioned about the, the fine print earlier is the fine print on that certificate to say, okay, so then how does a consumer then sort of go the next step to say, well, I just wanna check that you're actually insured for, you know, property investment advice.

So, you know, because that's how it is, so it would actually spell it out, but a lot of certificates I have seen would be very brief. So then the consumer could ask, can you just confirm that in writing? As long as it's in writing and it's true, well then consumer is protected. If it's not, well, it's kind of a problem of the.

Property professional because they shouldn't just put something in writing that they haven't validated with the insurer. Look, it would be wonderful if there were registers, especially if there were claims registered, so we could, we could search and go, how many problems did this advisor, or even in my profession, how many problems did the broker have?

Polina: No, not the case. So if somebody comes to an insurer, depending, doesn't matter which insurance policy it is for, the insurer always asks, when were you last insured? If they say, you know, recently or just about to expire or anything like that, as long as they say yes, I have been insured. They ask for a claims register for the last, some ask for five years, some ask for seven, some ask for 10 years, and unless they get that claims register on a letterhead of that insurer they used to be insured with.

They do not offer cover.

VM: So you mentioned earlier about, you know, in the event somebody had to claim multiple times in a year, and each time there's an excess and it accumulates. Do you come across that often?

Or there could be smaller claims as long as they don't reach higher than six mil in a

VM: Yeah, so two claims, even one claim. I think one claim might be a, I don't know, a particular litigious client for argument's sake. You know, one, one claim may be bad luck. You know, a staff member went rogue. I mean, there's a number of things that you might think might lead to one claim. The minute you get two though, I mean, does your alarm bells go off?

VM: If you, if you brought in, you know, the insurance company to review your procedures, I mean, do you get a discount for the fact that they could, they've then re reviewed your procedures and went actually pretty happy with these guys.

Polina: You don't get a discount because,~ um,~ you, we have minimal premiums, and then from there the premiums are stacked up depending on the turnover of the business, number of people working in the business and activities. You are unlikely gonna get a discount. As brokers, we have really good relationships with underwriters and insurers.

We often try to help get them to sharpen their pencils. It's very relationship driven a lot,~ uh,~ but if they've reviewed your processes and said it was good, and then if there is a claim, well, you know what, it's kind of on them as well.

A bit like home insurance. You know, they check where you've got it when you settle the property. Like there's no ongoing process to check whether you've got pi. How does that all work?

Polina: no one really ongoingly checks, I believe, but for an insurer, they would never issue terms or provide an offer to insure a business or a professional unless you fill in a SARA proposal form. In that proposal form, they will ask for your qualifications and your experience, right? More often or not, we are seeing they're asking for a full CV as well, because they wanna tick it off and know, but it's every insured.

Doesn't matter what profession you're in, has a duty of disclosure. Right. It's up to us. It's up to you to disclose what you know about yourself, and if you have hidden some facts and the insurer finds out, your policy can be voided. So it's, it comes to honesty and integrity and providing the information.

VM: ~Uh, ~uh, Reba are the Real Estate Buyer Agents Association of Australia. They do, the Reis don't. ~Um, ~but also you can be a member of an REI and you're not a license in charge, so you don't actually need to have the insurance.

You know, if you, uh, license in charge, you have to be insured, but if not, you are covered by the insurance of the licensee in charge. Assuming the licensee in charge has insurance, so I guess employees,~ um,~ working for a business that isn't insured, I guess there's. A problem. ~Um, ~also, a lot of people in the real estate space are contracting to,~ uh,~ a business where there's a licensee in charge and they have to, if they're a contractor, they need to also in New South Wales anyway, they need to be a Class one licensee themselves, which means they also need to be insured themselves.

You said everyone can get covered before, but does that change things?

Polina: At the moment, we haven't seen any publications from insurers that impose certain rules around ai. Of course, they look for quality in the advice, right? And, and lots of due diligence and. Basing it on individual circumstances rather than just using the same,~ um,~ you know, template for everyone. But there's no restrictions on use of AI or how, how deep you need to use the AI to do the research.

VM: No, and also it's the type of AI that people are using. We've got Luke Metcalf, who's a, a data specialist, AI specialist who's been in this space for decades and he's coming back on the podcast in a few weeks. And we are gonna be talking specifically about this. He's done run some tests with chat, GPT and, and,~ um,~ some very interesting findings, I will say.

But a lot of people. We're all using ai. We don't all understand necessarily how, where the AI is getting its information from, and I think that's something that's, that's, very critical for anybody, particularly, you know, if you're trying to do it yourself or if you're relying on an advisor, you wanna know how are they using this information, where are they getting it from? Do you think,~ uh,~ you know, I, I'm curious, like from a consumer point of view, what are the, what are the key questions that people should be asking themselves, but also their advisor about their insurance cover before they engage them?

So it's the, that process is ticked. They should also ask a simple question like you've just mentioned, where are you getting this information from? What's the source that you're relying on? I think that's really important because that will expose a lot of advisors. Because if they're getting it from not reputable sources, and I would say in a lot of occasions shared GPT might not be that reputable because it's not showing where it's coming from.

I think that would give a lot of confidence as well. But from the insurance point of view, it's just confirming that they actually insured and that it's valid. Because don't forget if they stop paying for it, it's not valid.

VM: No. Well, that's interesting. The, it's it. I was talking to a, a while back, I was talking to some people who work at the Office of Fair Trade in in New South Wales, and I'm pretty certain this would be the same in every. Equivalent body across the country. And they were saying that complaints against buyer's agents were on the rise. So they may not necessarily make an insurance claim or, or, or try to sue them, but they're complaining for various reasons. And so I guess when you talk to somebody who's used a buyer's agent and they've had a poor customer service experience, then that's the type of complaint they're getting.

His, his attitude was very much like, well, look, there's very few claims, and mainly because They can't put together a body of evidence to show that they've been given bad advice. Now, that's scary because early on when somebody just buys a property at the beginning, there's a fair amount of euphoria, and that's where all the five star Google reviews come from. From that, at the point of which, hey, I did it. I bought a property. Yay. And I like to see reviews that are from a client five years after they bought, you know, even longer to say, are they still happy? Are they certain that it was the right decision? Were they left with any, any unpleasant things that they had to manage that they had no idea about?

Polina: Absolutely. Look, first of all what I need to say, and I'm very sort of passionate about that. A general public always says, insurers don't pay claims. That is not true. I believe if there's coverage that has been provided to the person that purchased the policy, the insurer will look to pay a claim. It's very different.

They actually look to pay a claim, so they take it on a bit of a face value. When somebody complains and says, I've suffered a loss, this is what I think, and this is the documentation that supports it. So they work with the claimant to help them as much as possible, but a lot of times it's a bit emotional.

In play. But insurers would still, if possible, if there is a loss, they will pay the claim. They'll look to pay the claim. Reason being, they also don't wanna end up in the media. They don't wanna end up, you know, ~um, ~with complaints about the insurers. It's costly, it's unnecessary, and they understand that no one makes a claim unless they're very emotional about that.

So they try to deescalate the situation, help the advisor. In also to deal with it so they don't have to worry about it too much because once you've coaches the property, you should be able to focus on your profession, not on the claim. So they take that burden away.

Polina: Look to me, to me, reputation is key regardless of what you're doing. So you've gotta protect your reputation, and you can only do that by proper processes and customer service. Everything else, anything can happen in the world. You can't control that. So at the end of the day, an advisor should be insured.

A consumer should be sure that if there's a problem, they've got an avenue. To help themselves but in between is always that person that's stuck in the middle that's always gonna say, I haven't done anything wrong. Then they've gotta support that and it becomes a little bit of a battleground. But look, most claims we are seeing these days getting settled a lot faster than they used to be because the property market is more understood now than it was maybe 10, 15 years ago.

So it's completely, by beware really, you, and, and the PI cover's not really gonna protect you unless it's an absolute dire situation.

Polina: Absolutely. So it's, we are not talking, it has to be highly factual, non-emotional type of claim to get through. And unfortunately a lot of them are emotional. And where we seeing claims,~ uh,~ if we do see them, is through self-managed super funds. And you know the, there's no advice from a financial planner.

CB: Yeah, because obviously it's a trust structure, it's a tax structure, right? And so they're recommending to do a property through a certain tax structure. So do this in your super fund. So then that's become tax advice. And then if they market that, like, hey, come to us to do it in, they're almost like they've got the idea because of their marketing. And then that's the reason why they're doing it. So they realize their marketing failed, plus they went to this dangerous structure. ~Um, ~but even they do that anyway, they, they'll go like, oh, you've got X capacity. Oh, you're tapped out. Oh, have you thought about buying in your cell when in super funds? So like, is that where you've gotta be?

You know, they've gotta be really careful.

So, and to a consumer, the message is don't just rely on the property professional. If you are buying in that structure, there's others that can back it up and it's probably the best option for you. But have it in black and white. Have an advice that you can then send to the property advisor and go, okay.

This is my full advice and I now need you to help me to find the vehicle to fulfill that.

CB: Yeah, the other one's really dangerous was the trust lending that sort of exploded last two years. And,~ um,~ you know, there's a lot of content out there around limited borrowing capacity and you can just leverage, you know, to the. As much as you want. ~Um, Um, ~and then they would come in, well, how do I do that?

Polina: Absolutely. But in that scenario that you've just described, Chris, if a consumer suffers, they've got an availability to pursue that. Accountant and the property. So there's a few professionals that would be vicariously liable altogether. So all of a sudden it can be a really big claim from few different sources.

And then the insurers decide who is the one that actually has given. ~Uh, ~misleading and,~ um,~ incorrect advice, and that's where the claim gets paid. Doesn't necessarily mean that all of those insurers end up paying the client. They're just looking for the one that's okay, well that was your problem. And because of it, it was like a domino effect.

Everyone got affected, but at least there's an availability to a consumer to have more protection.

Okay. Oh, the prop. Okay, cool. All right, well I'll just do that. ~Uh, ~so yeah, the accountants, they're taking all the risk. ~Um, ~and you know, you saw that as well because the accountants are signing off letters for banks and,~ um,~ you know, and I think that's a huge issue that I think the, you know, the accountant industry sort of figured out as well.

Polina: Interesting you mentioned that because we insure quite a lot of accountants and a lot of them now are saying, I don't deal with these certain scenarios. I don't deal with self-managed super funds, or I don't deal. With setting up these structures, you know, they have to go to someone else and when they apply for insurance, they're very specific.

VM: To take us out. Have you got a property Dumbo for us? Belina.

Polina: ~Um, ~

CB: It's just a story to lighten it up at the end of the episode, just like a property sort of dumbos. The story, we can learn of something a bit humorous. ~Um.~

Polina: ~Um, Uh, Um. ~We manage insurance for property investors a lot, a huge amount of property investors all around Australia. And we had a client that rang up and said, oh, a tenant hung themselves and I wanna lodge a claim.

I said, wow, that sad Is the person alive? They're like, what do you care? My ceiling collapsed. And I said, well, that's very sad, but is the person okay? So I kept going back to the person and of course. They, uh, they were covered for the damage to the ceiling, but we had to describe that claim. There was a lot of, uh, reports that had to be submitted.

~Um, ~you just never know what's gonna happen inside your property when you're buying it. You're investing money in it, you want it to grow. And by the way, this is very much outside of the advice that a property professional would give you. So have your insurance buy for yourself as well for the property you purchased.

CB: Thanks so much. Belina really enjoyed chatting to you and I think it's,~ uh,~ a good topic we haven't covered and I think ~um. ~Something people are gonna, I feel like we'll be claiming on a bit over the coming years or trying to claim on. ~Um, ~but I don't think they've got a good, much chance,~ um,~ to be honest, is my takeaway.

I think they've gotta be really careful whenever you buy property, don't even if they've got insurance, don't assume that that's gonna protect you.

VM: Yeah, I think that's a takeaway message, isn't it? Thank you so much, Paulina.

Polina: You. Very welcome. Thank you.

au.

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