You wouldn’t hand your car keys to a complete stranger without car insurance, so why would you hand the keys to your investment property without landlord insurance?
If you own one or more rental properties, then landlord insurance is one of the most important
investments you will make. Not only does landlord insurance protect you from paying for damages, theft, and acts of nature associated with your rental property, but it also can protect you from financial liability associated with your tenants. Protecting yourself from the tenants who reside in your rental property is not only a smart financial decision, but can save you from tremendous losses associated damages they may be responsible for.
You are only making money off your rental properties when they are occupied and landlord
insurance can make sure that you are financially able rebuild or repair your rental investment as quickly as possible in the event of a claim. The sooner your investment is back to the condition necessary to rent, the sooner you are generating income again.
The two main types of insurance are: Landlord building insurance, and Landlord Protection insurance. Each one covers different aspects of the rental property and it’s important that you discuss these differences with your insurance agents.
Standard home buildings and contents policies do not usually provide cover for two of the most
significant risks facing landlords — damage by tenants and loss of rent.
Common features of a landlord insurance policy include:
• Malicious or intentional damage to the property by the tenant or their guests
• Theft by the tenant or their guests
• Loss of rent if the tenant defaults on their payments
• Liability, including for a claim against you by the tenant, and
• Legal expenses incurred in taking action against a tenant
It’s important to remember that not all landlord protection policies are the same. Some, for instance, are designed to be taken out in addition to a typical home and contents or strata title policy, while others are more comprehensive.
Whilst most mortgagors are happy to recommend their own landlord protection policy it is our experience that unfortunately this is not their CORE business. Additionally as we are not insurance advisors we cannot advise you which insurer to chose however we can give you our feedback of experiences we have had dealing with various organisations throughout the years.
We are able to discuss our experiences openly with you for your benefit.