We all deal with insurance often: car insurance, house & contents insurance, and even pet insurance. But what is landlord insurance and do you need it? Like any insurance, it is a safety net. A contingency plan for when unforeseen events happen.
Every landlord who owns an investment property has two main considerations. Firstly, that the rent is paid on time and secondly, that the property is well looked after (with no damage). It is AWP’s effort to ensure that we are comprehensive with our tenant selection process; however, conditions can sometimes change during the tenancy.
To eliminate these concerns, it is important to consider having adequate insurance cover to protect one of your largest assets.
Landlord insurance is a particular policy designed to protect your rental returns and expenses associated with property damage. Various policies will cover different outcomes, so it is wise to check what is included in your cover. There are changeable excesses, inclusions and exclusions with different insurance providers that can reduce your level of cover and overhead.
The most common features of landlord insurance is to cover intentional damage to your property caused by the tenants, their visitors or cover the rent in events where the tenant does not pay. However, to assist in comparing landlord policies we have summarised some of the different components that you will need to discuss.
- Loss of rent in the event that your property suffers damage, which makes it unable to be tenanted for a period of time
- Damage & malicious damage (excluding normal fair wear and tear)
- Rent default
- Ordinary house and contents insurance (fixtures and fittings)
- Tenant theft
- Legal costs
- Public liability
- Pet damage
Landlord insurance is not expensive (compared to the risk of lost income) and is a tax deduction to give you peace of mind.
Take time to compare policies and what is covered. Some policies will only provide insurance up to a specific limit, and others won’t pay more than one claim in a year or won’t cover you for certain events.
It is important to also note that some landlord insurances go beyond the main issues and also cover acts of nature such as storm damage, fires and floods – which when living in Queensland is handy to have!