Landlord Insurance: How Protected is YOUR Property?

There seems to be insurance for almost everything these days (e.g. cars, pets, house, income, travel, etc.).  Many Australian households take out cover to insure their assets and income, but drop the ball when it comes to insuring their houses. In fact, many Property Owners will lease their investment Property without the protection of Landlord insurance.

You’re probably thinking that you’ve spent enough on the property already without adding insurance costs on top right?

Isn’t this why you have a Property Manager?

Do you really have to get Landlord Insurance and is it really worth it?

While there is no legal requirement to have landlord insurance in place, ask yourself; Can you sleep well at night knowing that the Investment you have worked hard for isn’t protected and if anything happens that you might not be covered?

We’ve all heard horror stories about trashed properties, unpaid rent, drug labs, flooding and house fires before. This is an upsetting experience for Investors who are insured so you can only imagine the stress levels if that happened at an uninsured property.

While your Property Manager can undertake a thorough checking process to help secure great Tenants, there are some factors that just cannot be predicted; such as sickness, unemployment and divorce. Any of these could turn a great Tenant into one who no longer pays the rent on time or at all. Not to mention, if your rental income does get interrupted, the mortgage repayments and other bills related to the property will still need to be paid, leaving you out of pocket.

Insurance provides protection on your investment.

What does Landlord Insurance cover?

While different landlord insurance policies can vary, there are a number of standard inclusions and optional extras. This may cover some or all of the following:

Tenancy Cover

• Damages or theft by tenants, their visitors, and even their pets
• Legal expenses in the event that you have to take tenants to court as well as attending a tribunal hearing or retaining legal counsel
• Liability
• Loss of rental income (this includes the rental loss that is caused by the property being uninhabitable for a time due to accidents or natural disaster and also the out of pocket expenses you may need to spend for advertising, cleaning, repairs and leasing)
• Rent default
• Subletting

Building & Contents Cover

These will protect against damage to the building structure (including pipes, cables, external awnings, external structures, gas, plumbing, and fixtures) and also to the contents of your home (such as appliances, furniture, carpets, curtains, and fittings) in the event of:

• Fire
• Lightning strikes
• Storm damage
• Flooding
• Tree falls
• Earthquakes
• Explosions
• Vandalism
• Impact or accidental damage (such as from a car crash or a break-in)
• Water damage
• Civil unrest
• Rioting

What is not covered by Landlord Insurance?

Although landlord insurance is a great precaution, there are some things that landlord insurance does not cover. These include:

• Tenant repairs (any work repair executed by the tenant that results in damages to property structure or contents)
• General wear and tear (including mould damage or peeling paint)
• Building defects
• Tenant contents
• Market conditions
• Run-of-the-mill expenses (e.g.  payment for lawn mowing service or a plumber’s bill for unblocking a clogged pipe)

Is Landlord Insurance worth it?

YES! Landlord insurance is a very sensible investment if you are a Property Owner. As mentioned above, accidents do happen and even natural disasters are inevitable. Damage to your property is always a possibility, so you as a landlord need to be able to sleep well at night knowing that in the case of an incident or accident, there will be a safety net to protect you, your property and your tenants.

Fun fact – Insurance Premiums are often tax-deductible too!

Learn more about Landlord insurance with Reval Estate Agents

Please keep in mind, not all Landlord insurance policies are created equally. Whilst we are not insurance experts, our team at Reval  would be more than happy to discuss your options with you and help you in the decision making process when it comes to managing your investment property. Find a property manager NOW to get started.