The Importance of Landlord Insurance

Taking out Landlords Insurance is advisable risk protection

Imagine you bought a brand new computer only to hand it over to the person waiting behind you in line at the electronics store to take home and use, would you insure it?. Or you finally bought a brand new Mercedes but you know it’s going to be driven out of the store by a complete stranger and used for their daily commute, you would insure that, but many owners with assets of much greater value don’t insure them, their investment property! You need to research Landlords Insurance.

Investment properties are not like the other purchases we make. For the most part, everything else we own we personally look after and if something happens we are ourselves rightfully responsible. But the very nature of investment properties means it’s a different story. This, in essence, is why landlord insurance is so valuable. It means that while you’re not involved with the day-to-day of your property, you still have protections against things going wrong.

Your property is a valuable asset, it deserves to be protected. Doesn’t it? 

What does landlord insurance protect you from?

It depends on the policy, but in general, landlord insurance protects you from the kind of things that can cause you to lose out on your investment return either immediately or down the track. Damages, injuries, missed rental payments, sudden changes in tenancy- these are all common to landlord insurance.

What should you look for in a policy?

It always pays to be thorough (or even a little paranoid) when it comes to your landlord insurance policy. It’s logical the more events and occurrences your policy covers you for, the better. There’s an aspect that’s far less obvious though: try and make sure your policy covers periodic leases (those that extend to the periods beyond the formal signed lease).

What are premiums based on?

Often the correct assumption is that premiums are based on the value of the property. There are some notable exceptions, however, such as those operating on a State-based flat rate, but it depends on the policy. Sometimes the type of property will also be a contributing factor to premiums.

Public Liability Cover

As a landlord, you are obligated to hold current insurance which has a Public Liability component of $10mill minimum and to provide the Certificate of Currency to your property manager. Landlords Insurance has this built-in so is yet another reason to have the policy..

What about pets?

Pet ownership is becoming a bigger and more visible issue when it comes to renting- and rest assured there can be aspects of landlord insurance that cover this. A few states even have the option of a specialised ‘pet bond.’ For the most part, though, this is still something to be worked out between landlord and tenant. Many tenants are going the distance to prove just how little disruption their furry friends will cause too. You might even see some pet behaviour resumes coming through (yes, really).

What’s Potentially Covered – Examples Only

Loss of rental income
Protects you from loss of rental income as a result of scenarios such as those listed below.
Provides cover for:

  • Absconding tenant 
  • Defaulting tenant 
  • Failure to give vacant possession 
  • Death of a tenant 
  • Hardship 
  • Untenantable property 
  • Prevention of access 
  • Rent reduction 

Protects those furnishings you forget, like curtains, carpets, blinds and light fittings. 
Provides cover for:

  • Tenant Damage 
  • Flood 
  • Storm or rainwater 
  • Escape of liquid 
  • Fire or explosion

Protects your building against loss or damage caused by tenants, their family or their invited guests. 
Provides cover for:

  • Tenant Damage 
  • Pet damage 
  • Scorching

A good quality landlord insurance policy protects you against a number of things that other home and contents insurance policies do not cover. And the good news is that because it is an investment expense, your policy premium is tax-deductible.

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If you have a property in Brisbane that you would like to consider engaging a new property management team for, please feel free to contact Paul Tooze directly on 0414 037 007 or the friendly rentals team at All Properties Group (07) 3800 0988.
Otherwise, we hope you have enjoyed these insider tips.