Landlord Insurance for your Investment Property

As a landlord you want to best protect your investment property from the risks that come with renting your property. Some of these risks can include tenant damage, theft or tenants defaulting on their rent. Whilst you can minimise this risk by screening potential tenants, it can be a good idea to have a plan should something go wrong. Landlord insurance can provide you with a layer of financial security to help manage this risk. 

What is landlord insurance?

Landlord insurance is insurance for your investment property. It can cover out of pocket costs for the replacement or repair of insured items should a certain event occur. There are two main types of landlord insurance:

Building insurance – covers the physical structure of the property. This can include the building, garage, carport, fences, roof and fixed items inside the property such as light fixtures, built in wardrobes and kitchen cupboards.

Contents insurance – covers the contents of your property. This can include furnishings such as carpets and curtains. Contents insurance is particularly suitable for properties that are part of a strata such as apartments. This is because it is common for building insurance to already be covered by your strata. Check with your strata to find out exactly what you are covered for.

You can also choose to combine both building and contents insurance under the one policy. Commercial landlord insurance is also available specifically for commercial investment properties.

The events covered by landlord insurance will depend on the level of the coverage of your specific policy. Some events which can be covered include:

·        Theft by tenants, their guests or someone else

·        Malicious damage or vandalism by tenants, their guests or someone else

·        Accidental damage by tenants

·        Loss of rent due to default

·        Legal liability

·        Storm and rainwater damage

·        Fire damage

·        Water damage

·        Impact damage


What to consider when choosing a policy:

·        Inclusions and exclusions

Like all insurance policies it is important to know what is covered and excluded.  This can help you prepare if you do need to make a claim.

·        Does your tenant keep pets?

Most standard policies do not provide coverage for damage caused by a tenant’s pet. If your tenant is planning to keep pets, you may want to opt-in for accidental damage caused by pets.

·        Are there any risks specific to your investment property?

Consider researching any specific risks that your property may be exposed to. This could include high risk of floods or high burglary rates. By knowing your risks this can help you choose a policy that is right for your investment property.

·        Price

The higher the coverage of your policy, the higher your premiums will be. It is important to find a policy that both suits your needs and your budget. Good news is that landlord insurance premiums are generally tax deductible.

Talk to a Suitable Loans Broker today.

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