Landlord’s Insurance – What It Covers
Landlord’s Insurance is a policy that specifically covers property owners from financial loss and damage associated with renting their investment property. Landlord’s Insurance policy covers the building with the alternative to insure any indoor contents belonging to the landlord and other several essentials for investment property owners that are not covered by other types of home and contents insurance policies. The landlord insurance comes handy when it comes to the risks involved in renting out an investment property.
Typically, personal properties that belong to tenants are not covered by the landlord’s insurance policy nor does the policy protect the interests of tenants, however, liability policies protecting landlords or property managers may be beneficial to tenants in case of a loss for which the landlords or property managers are responsible.
There are different types of landlord insurance covering various risks and although the majority of tenants pay their rent on time every month and treat your property as if it were their own, there is always the possibility that a rotten apple could move in and leave you at a financial loss.
An exceptional landlord insurance policy protects you against several factors that other home and contents insurance policies do not cover.
Some policies cover short-term rental landlords who use sites such as Airbnb, Stayz and Flatmates.com.au to rent out a room or more in their home or a granny flat connected to their property.
If a guest or renter damages a property and the homeowners are not covered, the homeowners could face paying for the costly repairs on their own. What is worse is that homeowners could face a much costly public liability claims should a renter be injured while within the property.
What to look for in a landlord insurance policy?
A few sensitive things to check when purchasing landlord insurance is the “Terms & Conditions – what is and is not covered and the excess that applies when you make a claim. These components are often very dissimilar from policy to policy.
ARMA Insurance Brokers can help you find the landlord insurance policy that would best suit you.
How much does it cost?
The cost of landlord insurance is very important because you do not want your insurance premiums taking a big share out of your rental proceeds. There is a variety of options in what you can pay for landlord insurance, so it pays to shop around and let ARMA Insurance Brokers make things easier for you.
Fortunately, landlord insurance is not exclusively expensive. The cost of landlord insurance differs between the states and territories. It also varies by the possibilities associated with your property’s postcode. Insurance companies base their prices on components such as the risk of rental default in an area, the risk of damage by tenants in an area, and the risk of natural disaster in an area.
What is the difference between landlord’s insurance and buildings insurance?
Building Insurance policies normally provide cover for loss or damage to your building as a result of unexpected circumstances such as storm, flood and fire. However, when renting a property to tenants, you should also consider the risks that your tenant may cause such as accidental or malicious damage to your property and whether your Building Insurance will cover you for these risks.
Landlord Insurance provides protection for some of the tenant-related risks that may not be covered by standard Building Insurance, including damage caused by your tenant’s guest and friends.
One main difference includes the extent of rental income protection and whether loss of rent is inclusive of the standard or an additional option.
Do you have any of the following questions?
What are the Inclusions and exclusions of landlord insurance?
Does the policy have a weekly rent limit?
What level of insurance do you want? Building only or home and contents?
Do I need building insurance if I have landlord insurance?
Will you rent your property furnished or unfurnished?
Will you let your tenants keep pets on the property?
Are there any specific risks such as flood or fire your property needs to have covered?
How can you check if your investment property is in a flood zone?
Does the policy cover accidental damage or malicious damage, or just theft?
General Advice Warning
The information on this website is general advice only and does not take into account your personal circumstances, financial situation or needs. Please connect with an insurance broker to discuss your specific needs.