5 reasons you need landlord insurance

Insurance is one of those things that some people mistakenly think isn’t worth the cost.

Unfortunately, that’s why too many people choose not to take out appropriate insurance cover to insure their assets as well as their incomes.

Thankfully, when it comes to insuring their homes, most Australians wisely choose to do so.   

And for strata-titled properties, building insurance is included in your quarterly owner’s corporation or body corporate fees so owners just need to ensure they have adequate cover for their property’s contents.

One specific type of insurance is not on the radar of all property investors – but it should be.

Landlord insurance covers property investors for a variety of events that can result in a financial loss to you.

Plus, it’s tax-deductible, too.

While landlord insurance policies can and do vary, there are a number of inclusions that are usually standard or optional extras.

1. Rental loss

You can ensure your investment property for loss of rent, but that doesn’t mean during periods of vacancy.

Rental loss is when your property is damaged, perhaps by a storm, and it is uninhabitable for a period of time.

You can ensure your property for such an event, but you must be able to provide evidence of everything, including the exact rental loss that you have experienced.

2. Rent default and theft

Unfortunately, sometimes a tenant’s financial or personal circumstances change and they can morph from an ideal tenant to a worrisome one.

Sometimes they may stop paying the rent and then one day your property manager informs you that they’ve skipped town.

A landlord insurance policy can cover you for rent defaults in such a circumstance.

It can also provide coverage for theft, such as if that tenant also took white goods with them, because your property was partly or fully furnished.

3. Malicious damage

During your property investment journey, your portfolio will need to be constantly maintained because of the wear and tear of tenants living in them.

Of course, tenants are protected from paying for normal wear and tear under the relevant legislation.

But sometimes damage can be done to your property that is not normal – in fact, it’s malicious or even vandalism.

Perhaps your tenants hosted a party that got out of hand and significant damage to the walls was sustained.

In that instance, unless your tenants are prepared to pay to have the damage remedied (but you’ve probably given them notice to leave anyway), you can claim for your financial loss through an appropriate landlord insurance policy.

4. Legal costs

An investment-grade property, as well as a professional property manager, should reduce the chances of you ever having to have legal representation, but sometimes bad things happen to good people.

Many landlord insurance policies can provide additional cover for legal expenses that are incurred in remedying an issue with a tenant, such as attending a tribunal hearing or retaining legal counsel.

5. Public liability

One of the most significant benefits of landlord insurance is its public liability cover. 

Most policies should provide cover, up to about $20 million, which insures you against events such as an injury or death that occurred at your property.

This is insurance for you as the owner of the tenant or a visitor injures themselves, or worse, at your property and decides to take legal action against you.

The bottom line is that landlord insurance should be an automatic part of every property investor’s portfolio.

It’s always advisable to double-check the fine print to ensure the policies cover you for the basics, plus any additional extras like flooding in Queensland.

While landlord insurance policies do vary, they usually only cost a few hundred dollars a year, which is a very small price to pay for peace of mind, don’t you think?

Now is the time to take advantage of the opportunities the current property markets are offering.

Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.

You can trust the team at Metropole to provide you with direction, guidance, and results.

Whether you’re a beginner or an experienced investor, at times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s exactly what you get from the multi award-winning team at Metropole.

We help our clients grow, protect and pass on their wealth through a range of services including:

1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now! Click here to learn more
2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $4Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney, and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment-grade property.  Click here to learn how we can help you.
3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
4. Property Management – Our stress-free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years, and our properties lease 10 days faster than the market average.

from Property UpdateProperty Update https://propertyupdate.com.au/5-reasons-you-need-landlord-insurance/