What to Consider in Your Landlord Insurance

button_protect

Landlord insurance is a must if you want to protect your property from financial loss, damages and accidents. And premium prices do vary; the age, property type (house, unit, apartment or townhouse), size and structure, quality of finishes and what’s included (furniture and white goods) will all affect the price.

As well as the physical aspects, you also need to consider what else is included in your cover. What happens if your tenant trips and injures themselves on a broken tile in the bathroom? They can sue you for negligence, loss of income and damages, and these costs can very quickly add up.

If your property is part of a strata or community title, check what is covered by that insurance. Many insurances cover the building and public liability for the shared facilities, but not for inside the property itself. And double check what is classed as your property or shared facilities.

When you’re shopping around, here are some items you may like to consider including:

Replacement Value

Always insure your investment property to replacement value. This is the cost necessary to repair or replace your entire home. And make sure the building itself is insured – some Landlord Insurance policies will include this as part of a package, others won’t. Building insurance covers you for unexpected events that damage your investment property such as fire, falling branches and broken windows.

Natural Disasters

We’ve been having some pretty wild weather over the past few years. Repairing the damage from storms and floods can be extensive, so check your policy covers you for natural disasters.

Public Liability

Most landlord insurance will include some sort of public liability, but you will need to check the value. It’s also good to check what isn’t included in the public liability cover. Many policies don’t include ‘uninvited guests’, such as an intruder or burglar. Believe it or not, but if they injure themselves in your property and it’s deemed to be your fault, the intruder can sue!

Loss of Rental

Even if you think you have the best tenants in the world, there may be an issue. For example, if the property becomes uninhabitable for some reason (such as flooding or damage) and there is a vacancy for a period of time.

Other Points to Consider

Landlord insurance policies do not cover a tenant’s possessions. However, according to NSW Fair Trading, you can write it into your tenancy agreement you require the tenant to take out any form of insurance, such as home contents or public liability insurance.

Always ask too what else isn’t covered, such as malicious damage by a tenant. That way you can make an informed decision as to whether you want it included in your policy.

With over 40 years in the business, we have seen a lot of insurance claims and dealt with a lot of insurance companies. Always read the small print – what you consider as damage, the insurance company may view as ‘wear and tear’. On a positive note, we have seen a lot of insurance companies cover unforeseen damages.

And on an even more positive note, your landlord insurance can be used as a tax deductible benefit.

Our advice is to carefully look at the policy, read the policy Disclosure Statement and if you don’t understand it, or you are unsure, contact the insurance company. Ask what exactly it is you’re covered for and how it makes its decisions.

We would be very happy to share our experiences with you and answer any questions you may have when it comes to considering landlord insurance, and anything else regarding investing in property, so give us a call on 02 4956 9777 or pop into our office for a chat.