From cars to pets, travel to medical, house to income; there seems to be insurance for almost everything these days. However, despite it being so readily available, insurance still tends to be a thing that people mistakenly think isn’t worth the expense. While it’s not uncommon for many Australians to not take appropriate cover to insure their assets and income, most Australian homeowners are wise when it comes to insuring their homes. However, there is one type of insurance that might not be on the radar of all property investors; landlord insurance.
This often overlooked insurance is a great (we would even argue non-negotiable) investment for property owners who want to ensure that their property and rental income are protected. After all, renting out a property doesn’t come without risk.
What is Landlord Insurance?
Similar to other insurances, landlord insurance acts as a safety net for investment property owners to protect tenanted properties from the associated risks of renting out properties. Designed specifically for investors, Landlord Insurance includes additional protection for damage, as well as any other tenancy-related risks.
Why is Landlord Insurance important?
Landlord insurance plays an important role in the realm of investment property ownership by way of protecting the property owner and allowing contingency should the need ever arise; even the best of tenants can run into hard times.
Landlord insurance protects investment properties and assets that landlords could otherwise be liable for if they were damaged or stolen. Landlord insurance is an affordable way to protect your property – by being prepared, you are saving yourself time, money and stress.
What does Landlord Insurance cover?
While different landlord insurance policies can vary, there are a number of standard inclusions and optional extras.
Rental Loss and Damage
Unlike regular home and contents insurance, landlord insurance offers protection for tenant-related loss and damage. For example, depending on the policy, if a tenant defaults on rent, or causes any damage to the property, landlords may be able to recoup costs.
Additionally, if rental loss is experienced (not including periods of vacancy) as a result of the property being uninhabitable for a time (eg, due to accidents or natural disaster), property owners can ensure that rental loss is covered.
If Tenants Have Pets
Tenants with pets is becoming more and more commonplace. While the inclusion of pets is an adorable issue, they can cause damage to floors and gardens. As a result, it’s becoming more and more commonplace that insurance companies are increasing benefits to include payouts for damage caused by pets in investment properties.
While owning an investment-grade property and working with a professional property manager should reduce the chance of you ever requiring legal representation, as a landlord, it’s so important that you protect your asset and the income that you derive from it.
Many landlord insurance policies include cover for legal expenses that can be incurred in remedying issues with a tenant, such as attending a tribunal hearing or retaining legal counsel.
If tenants have organised to have someone live in the property that isn’t on the lease, it’s likely that they’ve not met yourself or the property manager. Additionally, not being on the lease also means that they avoid becoming accountable for any damage. This is where having landlord insurance can assist investment property owners.
Out of Pocket Expenses
As is normal in life, from time to time, minor incidentals may pop up. For example, if a tenant moves out unexpectedly and stops paying rent, depending on the policy, landlord insurance will cover for the loss of rent, as well as any cleaning, repairs, leasing and advertising fees that property owners may be subjected to as well.
Do I Need Landlord Insurance?
When it comes down to it, we would always advise that landlord insurance be an automatic part of every property investor’s portfolio. Landlords who forgo landlord insurance may be at risk of losing money, or missing out on potential returns when an accident, theft or damage occurs. While each landlord insurance policy does slightly vary, they typically only cost a couple of hundred dollars a year – a small price to pay for peace of mind!
If you need help in finding the right landlord insurance for your investment property, we’re happy to help! For the month of April, we are working with the team at Terri Scheer Insurance to help Darwin-based investment property owners insure their properties. Get in touch with us today to secure 15 months of Landlord Insurance for the price of 12!