Why maintenance is essential for landlord insurance
With the recent heavy rainfalls, we thought it timely to take a look at what landlord insurance may cover in terms of water damage.
Unexpected events such as heavy rainfalls can lead to property damage that may require insurance claims to cover the cost of repairs.
Damage caused by water leaks include water stains on walls and ceilings, damaged flooring, and mould growth. In some cases, extreme rainfall can even lead to structural damage to the property.
Insurance policies typically cover damage caused by water leaks, flooding, and storm damage, although the extent of coverage may vary depending on the policy.
Why a claim may be refused
Landlords may face challenges when making rain damage insurance claims; for instance, insurance companies may dispute the extent of the damage or the cause of the damage. Plus, they may argue the property wasn’t maintained.
Landlords do have a responsibility to ensure that their properties are well-maintained and provide a safe living environment for their tenants. This includes regular maintenance of the roof, gutters, and drainage systems, as well as ensuring that windows and doors are properly sealed to prevent water leaks.
This is why it’s imperative you take steps to prevent rain damage by keeping your property well maintained.
Importance of inspections
Tenants don’t always immediately inform their agent, or indeed notice water damage such as small patches of mould, so it’s imperative routine inspections are carried out to uncover potential problems and spark maintenance action before they worsen.
Our inspections include checking drains and gutters, checking for signs of mould or damp, having air conditioners serviced, mending any broken or leaking fixtures and generally inspecting and suggesting essential repairs on any aspects that could present problems.
How to make a claim
When making a rain damage insurance claim, landlords must provide evidence of the damage, such as photos, invoices for repairs, and any other relevant documentation. It is also important to report the damage to the insurance company as soon as possible to ensure a timely resolution of the claim.
As part of our service to our landlords, we assist in making claims.
Owners of properties in a strata corporation
If you own a property in a strata corporation, the situation is a bit different, and be warned, there may be some disputes when it comes to making a claim.
The Real Estate Institute of NSW (REINSW) advices:
- Common Property – It’s the owners corporation’s responsibility!
The primary responsibility of the owners’ corporation in relation to common property is that the owners’ corporation is required, pursuant to s106 of the Strata Schemes Management Act 2015 (Act):
(a) to properly maintain and keep in a state of good and serviceable repair the common property; and
(b) where necessary, to renew or replace any fixtures or fittings comprised in the common property.
With very few exceptions, the roof of a building together with associated structures and weatherproofing elements will be classed as ‘common property’.
- If It Leaks, then the Common Property has Failed
However, it can get a bit messy. Sometimes owner’s corporations delay dealing with repairs or maintenance to common property because they look for excuses, such as “It’s condensation from inside – the lot owner has their heater turned up too high and has to open their window!” or “The lot owner needs to close their balcony doors or windows – that is what is letting in the water”.
Once again, this is where regular inspections and your property manager steps in with evidence to support your claim.
- Damages payable by the owners’ corporation for common property failures
Each case is different, but damages which have been found to be recoverable by a lot owner against an owner’s corporation include:
- Rental loss and alternate accommodation expenses
- Costs to clean and carry out repairs to an apartment
- Legal costs
- Experts’ fees.
We always advice landlords to carefully review their insurance policy, be it their own or a strata policy, to understand what is covered and what is not.
What to look for in a landlord’s insurance policy
Insurance policies will 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.
The plus side is, the premium is generally tax deductible – check with your financial specialist.
While we cannot recommend an insurance company, we can advise on what to look for and 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 work hard to ensure you 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.
For more property tips and ideas take a look at our Facebook page.