When it comes to protecting your asset, we strongly recommend you use a specialist landlord insurance provider as many general investment insurance providers offering cover for landlords may not be sufficiently covered by some.

But as a landlord, what should you be thinking about when taking out an insurance policy?

Here’s a guide of what you need to consider:

Building

As per your home insurance, you need to ensure the structure of the building (eg roof, walls, doors, fitted kitchens) is covered for events such as fire, flooding, vandalism and theft.

If you have a strata or community titled investment property, check to see if your building is covered in the corporation’s insurance.

Contents

If you are renting out your property unfurnished, you may not need as much cover as a furnished property. But do think about other items such as internal blinds/curtains, carpets, light fixtures, and appliances.

Rent default or other loss of rent

This is probably one of the biggest points of difference between home and landlord insurance, and covers rent loss due to an insured event. You will need to check on all eventualities, but most will protect you against loss of rent due to:

• Defaulting on the rent for whatever reason
• Tenant eviction due to a court order
• Tenants obtaining a hardship order
• Unexpected death of tenant

The number of weeks for non-payment of rent you can claim for may also vary between insurers; some will pay 12 weeks’ rent, others up to a full year, others up to a fixed monetary amount.

It’s worth noting too, payments can often take time to kick in, which is why it’s important to have a bond of four weeks rent.

Cover for public liability

While it’s your responsibility to ensure your property adheres to the current safety requirements, you also want to ensure you’re covered in case someone, for instance, seriously injure themselves in some way. Public liability insurance will often cover associated medical and legal costs.

Other legal costs

These will cover you in the event you may require legal representation, such as if you need to evict a tenant by court order or make a legal claim for rental loss.

Malicious and accidental damage by tenants

Accidents do happen, so make sure tenant damage is included your landlord insurance policy. There may be a separate coverage for ‘malicious’ damage (such as vandalism and theft) so read the policy carefully to make sure you’re covered for both.

Other considerations

Insurance policies will also vary according to the excess you are willing to pay and the level of cover. It’s down to you to consider the risk factor and determining what aspects of your property are worth paying extra for.

When comparing quotes, don’t be guided on price alone, it’s worth paying a few more dollars for the extra peace of mind. In the same breath, don’t be afraid to negotiate; while the provider may not be moved on price, you may get higher claim limits or a lower excess. You may also get a discount if you have a couple of properties insured with the same provider.

Another point to remember is according to the Australian Taxation Office (ATO), your premium could be tax deductible. Check with your financial specialist.

For more information on insurance, take a look at our blog on why your insurance claim may be denied. You may also like to visit a couple of our ‘jargon’ busting blogs, here and here.

While we cannot recommend an insurance company, we can advise on which companies we see landlords get the best result with when they do have issues.

Our team is always keen to share its knowledge and help you on your property investment journey and ensure get the best out of your property. We’re always here for an informal chat to answer questions, so give us a ring on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office.

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