The Right Landlords Insurance

8/3/2019

These days we insure everything and as a landlord it’s now seen as must to have a policy in place that covers you as a landlord, the choice of policies are endless which has made for some competitive pricing.

Did you know;

Many of the larger insurers, where we insure our home, cars, income and lives offer policies for landlords insurance that don’t cover for events such as accidental damage or what they sometimes refer to as a result of “Bad House keeping.”

Getting the right policy is not always clear but so important.

Claiming on your landlord’s insurance policy shouldn’t be and isn’t in my experience a regular occurrence but where a Bond can be consumed so quickly for Rent Arrears, Invoices, Damages and cleaning it’s a must have in place, if you as a landlord, do not wish to bear a financial loss when a tenant vacates your property or a typically insured event occurs.

Pursuing a tenant where a property has been damaged or the tenant has absconded can be a minefield, and most property managers can guide you through or facilitate that process, BUT, there’s only so far we can go.

Property Managers can get Tribunal issued orders and attempt to have those orders enforced via a local court or even a Debt recovery agency but those do Add on more costs in fee’s and charges which the landlord needs to cover until recovery or a successful insurance claim.

A better alternative is a thorough Landlords insurance policy (some costs less than $1.00 per day), believe me this is not an advertising situation as I can’t legally recommend any one Insurer but I can advise of several companies that give you a policy you can actually claim on when need be.

A Case Study:

A tenant had vacated the property leaving us with a small amount of rent owing, cleaning and repairs to walls which quickly consumed the rental bond. They’d also obviously been preparing food directly onto a New Marble Benchtop leaving knife marks across the marble surface. The Owner was not covered for what the insurer classed to be Bad Housekeeping and had to pay to rectify the damage. Despite enforcement orders and Listing this tenant on a database the owner did not recoup their loss.

This was a policy costing $900 per annum, Insurance from a Landlord Insurance specific provider would have provided coverage at a cost of $323.00 per annum and would have covered the cost of re polishing and surface protecting the marble.

It’s not all that hard to change and the cost savings should be motivation enough.

The take away advice here is get your current policy and check it twice and if you don’t have landlords insurance then get it!

What to look for?

You need to be covered for:
  • Loss of Rent
  • Hardship
  • Absconding
  • Failing to give vacant possession
  • Defaulting on Rent
  • Accidental & Malicious Damage
  • Theft
  • Pet Damage
  • Flood Damage
  • Death of a Tenant
  • Hardship
  • Fire
  • Storm / Water Damage
  • Legal Expenses
  • Liability
  • Drug Lab Clean Up (yes)
  • Loss and damage as a result of Domestic Violence

Most of the policies from specific Landlord Insurers cover all of these items above, whilst I can’t recommend you to one insurer for legal reasons, you can ask me for Brochures of several insurers that I have worked with in the past so you can make an informed decision.

In the end you’re paying for peace of mind and protecting yourself from potential financial hardship if you end up with unexpected costs and a property in a state that can’t be re let straight away.

LASTLY: There are several insurers that will only consider a policy as valid if there is a Fixed Term Tenancy in place. So if your tenants were on a continuing agreement you might be paying for a policy that will not pay you out because of this technicality. In this day and age where renting provides all with some flexibility these policies in my opinion don’t suit anyone and do not work for anyone. It’s unrealistic so I would recommend checking  your Insurers policy on this point.

Hope this has been of some help! Phew, there’s a lot I know!

Antonio