What is landlord insurance?
Landlord insurance is like a security blanket for property investors. It is a type of insurance that specifically covers risks that are unique to leasing a property. A comprehensive policy can offer landlords peace of mind and assurance, protecting you from substantial expenses and losses. You can rest easy knowing that if something does go wrong, your out-of-pocket costs will be minimised.
What does landlord insurance cover?
We always want to think the best of others and while most tenants take good care of the property they are leasing, those that don’t may intentionally cause extensive damage. Any intentional damage to a rental property is not usually covered by a standard home and contents insurance or a body corporate/strata insurance policy.
And what happens if your tenant just packs up and leaves? Or fails to pay rent for an extended period of time? Both of these scenarios can lead to significant loss of rental income.
A landlord insurance policy covers most tenant-related risks including loss of rental income, and loss or damage by tenants to your property and contents including:
1. Loss of rental income from tenant default
Protects you from loss of rental income as a result of scenarios such as defaulting or absconding tenants, death of a tenant, hardship and failure to give vacant possession.
2. Loss of rental income from an insured event
Protects you from loss of rental income as a result of an insured event such as a fire, or flood, as your tenants can’t live in the property until the property is habitable again.
Can protect overlooked furnishings such as curtains, carpets, blinds and light fittings from accidental loss or damage, flood, water damage, malicious damage, fire or explosion.
Can protect your building against loss or damage caused by tenants and/or their invited guests including accidental, deliberate or malicious damage, pet damage and theft.
How is landlord insurance different from home insurance?
As an investment property owner, you may already have home insurance to cover your building against damage and destruction from all the usual unforeseen circumstances (flood, fire etc) – just as you would for the home that you own and occupy through a body corporate. Landlord contents insurance is an insurance that specifically covers you for tenant-related risks that are not covered by home insurance or body corporate/strata fees.
Why do I need landlord insurance?
Without insurance, investment property owners stand to lose significant rental income dollars that exceed the initial bond amount. For example, evicting and replacing a tenant who has stopped paying rent can take a long time. During that time, your precious rental dollars are not being received while your investment loan repayments still need to be made! Landlord insurance can alleviate some of the financial stress.
In the case of tenant damage – accidental or otherwise – repair costs quickly add up and rental income can stop while repairs are undertaken. These headaches can be easily avoided with a sound insurance policy specifically tailored for landlords.
How do I get the best deal on landlord insurance?
Fortunately, iSelect’s team of consultants are ready to help you learn more about landlord insurance and find the right landlord insurance policy for you.
Compare contents insurance online here.