Insuring your own home can be challenging enough, but it’s doubly hard for landlords.
Most landlords have no idea if they’re covered for malicious damage, loss of rent, meth contamination and similar rental-specific risks. And unfortunately, many aren’t.
There are a range of insurers out there offering both ‘landlord’ extension options as well as landlord-specific options – but even still, it doesn’t mean that they actually cover all the risks a landlord may face. It is essential that landlords maintain, review and potentially update their insurance cover for their rental properties!
Risks that aren’t covered by standard homeowner policies include:
Adding the ‘landlord extension’ options to basic homeowner insurance doesn’t always provide an acceptable level of cover. Then there are landlords who choose ‘budget’ insurance hoping to save money – many of which pay replacement less depreciation. Remember, that ‘cheap’ often means inadequate cover. Most homeowners, and landlords, are likely to be under-insured even if they’ve chosen ‘replacement’ policies, which these days are limited to a sum insured.
Then there are standalone insurance options from third-party companies designed to be ‘bolted onto’ existing policies to boost your protection. These policies don’t cover the house, but do cover many of the risks outlined above, and can cost from $33 per month. This, matched with the right standard policy with another insurer provide landlords the most comprehensive options for cover.
Recent precedent-setting cases have changed the way the Tenancy Tribunal views liability for any accidental or careless damage caused to the rental property.
Where tenants were previously liable for any accidental or careless damage done to the property, they now have the benefit of using the Landlord’s insurance to remedy this making it more important than ever that you have specific, and adequate, Landlord Protection Insurance.
The fine print on many policies requires that landlords carry out obligations such as doing regular property inspections (every 13 weeks) and reference checks. Remember, if you haven’t followed the fine-print, the insurance company has grounds not to pay out.
At Ray White we recommend that landlords use an insurance broker who specialises in rental insurance. Through the use of a Ray White property manager, our landlords have access to specific landlord insurance options, only available to those who use accredited property managers, like ourselves (often at lower costs too). Our Gold management packages come complete with this Landlord Insurance included. If you’re still keen to go it alone, do your research, and consider using the services of a Broker. Whatever policy you ultimately do choose – remember, it should be reviewed regularly.