If you are a property owner and investor you have probably asked yourself do I need landlord insurance? Position One Property will help answer this question. If you own property of any sort, whether it be a house, a car, or a boat you should have it insured; but if you own an investment property you also need to consider the addition of landlord insurance.
What is landlord insurance
Landlord insurance is different to regular home and contents insurance as the policy can cover you for additional financial protection connected with a rental property. While your policy will cover the loss of the building you have the added protection of additional coverage for damage and loss of rent. Let’s take a look at why you need to take out landlord insurance.
While every policy is different most policies in Queensland offer protection for the following:
Loss of rental income. This could include:
- A tenant abandoning your property without providing prior notice.
- Tenants failing to pay their rent (defaulting tenants) or failing to vacate the property when required.
- The death of a tenant.
- If a tenant has ended a lease on the grounds of financial hardship.
- A tenant being unable to access the property such as in the event of fire in a neighbouring unit.
- The property being left in an unlivable condition. (This could include such things as storm or fire damage or damage caused by the tenant).
Damage to your building (home or unit). You will have to look at your individual policy for this but policies can include:
- Pet damage.
- Natural disasters that are covered under your policy.
- Intentional & accidental damage caused by your tenants and or their guests.
Damage to your contents (possessions in the home that you own). While most home and contents policies will cover the basics. Landlord Insurance can also cover:
- Theft and burglary of your items is they are stored at the property.
- The theft or damage of property (such as furniture and electronics) if such items are provided under the lease.
How much will landlord insurance cost?
According to the 2018 Canstar Landlord Insurance Star Ratings Research landlord insurance premiums have decreased, which is welcome news for investors. Please email or call Position One Property and we can offer you a range of options.
While this may seem like a significant expense it is generally an expense that is tax deductible. This is because the ATO covers them as an investment expense.
Should I take out landlord insurance?
At Position One Property we provide a 5 star management team but this does not mean we are unable to prevent the unforeseen, such as damage from tenant's guests or natural disasters. We recommend all of our owners assess their individual need for landlord insurance and take out a policy that is suitable for them. If 4 weeks lost rent is less than the cost of a policy, then landlord insurance is definitely worth considering. Replacing walls or carpets due to intentional or unintentional damage can also be an expensive exercise. In most cases the cost of a policy would more than compensate for what if would have cost you as an investor if you didn't have landlord insurance.
If you don't have landlord insurance and are considering taking out a policy Canstar offers are great way to compare insurers and their coverage.
Source: Content support, Canstar.com.au