Landlords Insurance – What is it?
When it comes to insurance, being an owner-occupier is quite different from being a landlord. A recent survey conducted by Woolcott Research of 300 landlords showed that two out of five self-managing landlords interviewed had experienced tenants defaulting on rent or damaging their property. That’s why it’s important to take out landlord-specific insurance.
Landlord protection insurance covers some particular risks associated with renting out a property that may not be covered by a typical home and contents or strata title insurance policy. According to the Woolcott study, less than half of all self-managing landlords have specific landlord insurance, even though three out of five recognise a bond is not sufficient to cover most incidents with tenants. These landlords are putting their valuable assets at risk. You do need to make sure you are covered should something go wrong.
Why do you need it?
Most tenants take good care of the property they are leasing, those that don’t may intentionally cause extensive damage which is not generally covered by a standard home insurance or body corporate policy. Standard home buildings and contents policies do not usually provide cover for two of the most significant risks facing landlords malicious or international damage by tenants and failure to pay rent.
What does it cover?
Common features of a landlord insurance policy include:
- Malicious or intentional damage to the property by the tenant or their guests
- Theft by the tenant or their guests
- Loss of rent if the tenant defaults on their payments
- Liability, including for a claim against you by the tenant, and
- Legal expenses incurred in taking action against a tenant.
Not all landlord protection policies are the same. Some, for instance, are
- Designed to be taken out in addition to a typical home and contents or strata title policy, while others are more comprehensive.
- Covering contents of the property. This is particularly important if you rent out a partially or fully furnished property.
- List the incidents you are covered for, or you can obtain accidental loss or damage cover to protect against a broader range of incidents.
- Pay you the loss of land value caused by government legislation or local authority bylaws that reduces the floor area of your buildings.
- Following an insured loss, you may discover that you are required to comply with government or local authority by-laws which have come into force since your building was built. These unexpected additional expenses can be covered.
- Include the benefit covering the complete cost of rebuilding the property to new condition up to the sum insured as listed on your schedule. Even the cost of removing debris and the cost of architects, surveyors and legal fees are often automatically included in the buildings sum insured.
- Provide the optional cover for the loss of rent following accidental loss or damage to your buildings. If your property is so badly damaged that it is uninhabitable, Insurers will pay the lost rent until the buildings can be lived in, for up to 12 months.
Who can help?
An insurance broker’s role is to act as your representative and work in your interests, seeking the best cover at the best price for you with their skill, market knowledge and experience. Call a good one. Call CPR –Experts who will save you
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