Landlord Insurance - What is it?
High quality Landlord insurance will cover you for incidents and accidents that home and contents
insurance will not, including loss of rental income, malicious damage by a tenant or damage to the
property itself. While Landlord Insurance is not a legal requirement for investors, our Rental Agents
highly recommend you invest in Landlord insurance to ensure your property is completely covered.
Do I need it?
If you own a residential investment property, whether it is leased through an Agent, rented through
you privately or rented for short stays through Airbnb, then you should consider investing in Landlord Insurance.
Can I add it on to my home and contents policy?
There are a lot of insurance providers who offer Landlord insurance as an “add on” to your existing
insurance policy. However, from our experience in assisting Landlords when making claims,
we often find that companies who offer Landlord insurance as an “add on” extra do not properly
cover Landlords, or do not cover a wide enough range of incidents and accidents to make the claims
process worthwhile. For example, there are some insurance providers who will only cover you for
loss of rent if the tenant is currently in a fixed term lease agreement. This means that if your tenant
has vacated, and therefore is no longer in lease, you as a Landlord would not be able to claim that
lost rent, even if your tenant has absconded and left the property vacant. Trust us, this is NOT the
news you want to hear when you’re already out of pocket! Companies who specialize in Landlord
insurance are typically run by people who have experience working in the Real Estate Industry, so
they have a better understanding of what their clients really need to be covered for, meaning you
will be covered for a wider range of incidents, with less loop holes.
How do I choose between providers?
Insurance policies can be tricky to choose between after all, many of them seem to
offer the same thing for the same price. If you do not have Landlord insurance at the
moment, than we suggest starting by calling two or three Landlord insurance companies and asking
for their Policy Disclosure Statement along with some information on exactly what sorts of
cover they offer, as well as for what price. This way you can compare covers and costs before
calling and digging a bit deeper. If you do have Landlord Insurance but it’s with a company who
does not specialize in this area, we recommend you call your insurer to ask them a few questions,
such as:
- Am I covered for loss of rent, even if my tenant is not currently in a fixed term
lease agreement? Am I covered if a tenant defaults on their rent? And up to what amount am
I covered for?
- Am I covered for loss of rent in between the time that the previous tenant vacates, and the
new tenant moves in, if the property needed cleaning and damages repaired from the
previous tenant?
- Am I covered for accidental damage and malicious damage done by the tenant? If so,
exactly what is classed as accidental and malicious damage by your company? How do you
determine if the damage is accidental or malicious?
- Am I covered if the tenant’s pets damage the property? If yes, am I covered if the pets were
there without my consent, as well as with my consent (i.e in the lease).
- Am I covered if a tenant is running a methamphetamine drug lab from my property?
- Am I covered for changing of locks to the property if the tenant does not return the keys
upon vacating?
- Am I covered for the cost of cleaning up if the tenant absconds and leave behind their
possessions and rubbish?
- Will you offer me a better rate if I have multiple properties to insure?
- Exactly what natural disasters am I covered for, and up to what amount?
- Am I covered in the event of a flood of any description, including a natural disaster, dam
overflow or excessive rain?
- Does my cover reimburse me for the cost of having to attend Tribunal in the event that I
require a warrant of possession to have the tenant removed?
Who do I call?
While sellbuyrent real estate cannot recommend specific policies, as we are not insurance
specialists, we have dealt with the following companies regularly and have found them to be very
helpful, knowledgeable and comprehensive in their options for cover:
TICA Landlord Insurance - 02 9743 1800
EBM Insurance - 1300 467 873
Terri Scheer Insurance - 1800 804 016
As with any Insurance, it’s always something you wish you had invested in when you need it the
most. It’s a small price to pay for total peace of mind, so don’t delay your decision to be
completely covered!
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