Landlord insurance cover is essential to protecting your investment property. Without proper landlord insurance, you could be left paying for property damage and other tenant-related problems out of your own pocket.
Serious property damage can also leave you without a means to collect rent or having to rebuild your rental property. Landlord’s insurance can help to quickly replace and repair damage while covering court fees and other financial costs.
In many cases, a bond won’t be enough to cover tenant-related damage to your property. While some landlords might believe they can save money by not getting insurance, the high risk and cost of damage on an investment property will likely outweigh insurance fees and premiums.
The cost of landlord’s insurance for residential investment properties is also normally tax-deductible, making it even more affordable.
What Is A Landlord Insurance Policy?
Landlord insurance can cover you for these potentially expensive scenarios:
- Theft or burglary by tenants or their guest’s
- Malicious damage or vandalism by tenants or their guest’s
- Loss of rental income due to tenant default
- Legal expenses required to evict a tenant
Landlord insurance can also cover you if you have a rental property that you rent out on a short-term basis, for example via Airbnb or similar, or if you rent out a room in your home, or a granny flat that’s attached to your property.
In the event a tenant or guest damages your rental property, you could be faced with expensive repairs that aren’t covered by your home and contents insurance policy. Even worse, you could face expensive public liability claims if a renter is injured while staying on your property – which could amount to hundreds of thousands of dollars.
What Does Landlord’s Insurance Cover?
Unlike other types of cover, landlord insurance is tailored toward tenant-related issues, such as property damage, theft or unpaid rent. Landlord insurance coverage typically includes:
- Theft and vandalism by a tenant
- Delay or loss of rental income
- An early break of the lease by the tenant
- Fire and natural disasters
- Major building damage, such as gas explosions or water damage
While standard landlord insurance policies aim to cover the most common and expensive risks of leasing a property, additional building cover can protect your investment property even further, including damage to:
- Fixed appliances (e.g. air conditioners, dishwashers)
- Pipes and cables
- Walls and windows
- Gas or plumbing systems
- Fixtures and fittings
Theft or damage to specific items and furnishings which aren’t typically covered by landlord insurance or building insurance may come under personal home & contents insurance – including:
- Electrical appliances
- Carpets, curtains and blinds
Depending on your insurer, some parts of your property may be covered by your landlord insurance policy and others by building insurance. Building insurance can also potentially cover loss of rent while your property is being repaired, although unlike landlord insurance this is usually presented as an optional extra.
What To Consider When Choosing A Policy
Most tenants will take good care of a property they’re renting, but there’s always the risk of an accident or other change in circumstances. In these cases, damage can be caused to your rental property that isn’t covered by standard policies. Properly insuring a property and its contents can give you the peace of mind to know that your investment property is protected.
Liability cover can also be a consideration for landlords. This covers your legal responsibility for accidents that occur on your rental property, resulting from your negligence. As medical bills resulting from an incident like this can be costly, property owners should also consider whether their personal liability could be at risk.
What Should Be Included In My Policy?
- Cover for theft and vandalism by a tenant
- Liability protection from accidents on your property
- Protection from loss of rental income during repairs
- Protection in the case of default on rent or break of lease
- Protection in the case of explosions, water damage and other expensive structural damage
- Protection against serious damage to internal building systems such as gas or plumbing
- Protection against tenant’s damage to your rental property, whether intentional or accidental
It’s always important to check the terms and conditions in the Product Disclosure Statement (PDS) of your landlord insurance policy to ensure you’re correctly covered and know when you can claim.
Phoenix Insurance Brokers Pty Ltd can help you to find the right insurance cover for your needs. Our dedicated team will work to get the best deal possible and assist you with the claims process. Contact us today to see how we can help you.
Frequently Asked Questions
Landlord’s insurance is a type of business insurance specifically created to protect the property owners who rent out their residential and commercial properties. It covers the owner’s financial losses due to events such as fire, theft, accidental damage or third-party liability claims.
Any landlord or property owner who wants to protect their investments from potential losses due to accidents or other unforeseen circumstances should consider getting landlord’s insurance.
At Phoenix Insurance, our experienced commercial property insurance brokers can evaluate the risks to you as a commercial property owner or landlord, ensuring that you have tailored insurance coverage to protect your assets.
Having landlord’s insurance helps to ensure that any financial losses resulting from accidents involving your properties are minimised so that you can continue with your rental business without extra costs.