What Is Landlord Insurance and Why Is It Important
What Is Landlord Insurance and Why Is It Important?
Landlord insurance is designed to protect investment properties against an insured event that may cause loss of rent, malicious damage, or theft. The insurance premium in this case depends on the service provider and the rental agreement.
Landlord insurance is invaluable if you are renting out your property. Without it, you may run the risk of being liable for any damage caused by tenants. Good landlord insurance will minimise this risk, saving you valuable time and money.
What does landlord insurance cover?
A landlord insurance policy may cover some or all of the following:
Tenancy cover
- Damage or theft by tenants or their guests
- Loss of rental income
- Rent default
- Legal expenses in the event that you have to take tenants to court
- Liability
Building cover
Building cover will protect against damage to the building structure (including pipes, cables, external awnings, external structures, gas and plumbing, and fixtures and fittings in the event of:
- Fire
- Lightning strikes
- Storm damage
- Flooding
- Tree falls
- Earthquakes
- Explosions
- Vandalism
- Impact damage (if a car crashes into the home or in the event of a break-in)
- Water damage
Contents cover
If you are renting out a furnished home, additional contents insurance can protect you against theft or damage to the contents of your home such as appliances, furniture, carpets, curtains, and light fittings. You may be able to choose the excess you pay and add on additional extras including cover for when appliances stop working and accidental damage.
What is not covered by landlord insurance?
Landlord insurance is a great precaution for anyone who is renting/leasing out their property. However, there are some things that landlord insurance does not cover. These include:
- Tenant repairs (handiwork carried out by tenants that result in damage 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 (such as payment for lawn mowing service or a plumber’s bill for unblocking a clogged pipe)
If you do decide to take out landlord insurance, be aware there are several policies available and not all are the same. For this reason, make sure to take some time comparing landlord insurance policies before signing up.
Why Choose a Reliable Landlord Insurance Company?
It is wise to choose a provider who specialises in landlord insurance, rather than a general insurance company.
For instance, a property owner with a home insurance policy would not be safeguarded against a case of abscondence. If the tenants vacate suddenly, leaving behind damaged goods and rental arrears, without landlord insurance, you cannot ask for compensation.
As a result, the property owner cannot claim for loss of rental income, property damages, and end of lease cleaning. All this because the landlord insurance option was absent from your home insurance policy – leaving the owner out of pocket at an already stressful time.
With a qualified landlord insurance partner, the cost can be more competitive and the policies are usually inclusive of extra amenities. This makes it well worth going with a specialist for the peace of mind of knowing your property is as protected as possible.
Do you need landlord insurance?
There is no legal requirement for landlords to have landlord insurance, but it is worth investing in even just for peace of mind. Accidents do happen, and if your property is damaged or if a tenant is injured while staying on your property, you could be up for thousands of dollars in liability claims and damage repair costs.
As a landlord, there is also a very real risk of a tenant defaulting on their rental payments. As the cost-of-living puts pressure on household budgets and the ability for a tenant to pay their rent, this can result in loss of rental income which can affect your own financial standings. Having landlord insurance will help cover these periods of income loss so that you do not have to.
Even reliable tenants make mistakes. Having landlord insurance minimises risk for everyone and saves any emotional and financial stress during a tenancy.
In addition, your insurance premium may be tax-deductible so that you may be able to get your money back.
Celsius Property strongly supports our owners having the peace of mind to avoid financial and emotional stress by taking out a Landlord Insurance policy. If you don’t already have Landlord Insurance but are interested to find out more, please don’t hesitate to call our Property Management team to discuss.
Regards,
The Celsius Property Management Team.
