We are often asked the question – Do I need landlord insurance?
The short answer is, absolutely. When it comes to an asset as valuable as your investment property, landlord insurance is a must. There are a number of instances in which you will be relieved that you made the decision to take out landlord insurance. If you plan to spend a lot of money buying a property, it is wise to spend money protecting yourself. We will take a look at some of those instances in this blog.
Natural disasters and accidents
In the event of an unexpected natural disaster or a major accident that causes damage to one's property, your landlord insurance will come to the rescue to ensure the necessary repairs can happen and mortgage payments can continue. Some examples of these types of incidents would be major storm damage, major water leaks, floods, and fires.
In the very rare occasion, unfortunately, some tenants will cause damage to a property on purpose. This can be stressful to know that your investment property has been damaged maliciously. It is crucial to make sure you have the correct landlord insurance coverage should you be faced with a situation such as this.
What if your tenant's circumstances change?
The tenant's circumstances can change for so many reasons. Health, loss of a loved one, loss of income, relationship breakups, etc. When and if your tenant’s circumstances change, they may not look after the property as well as they have or not be able to continue to pay their rent. Depending on your insurance policy, it would cover you for loss of rent, property damage, belongings you provided and any cost involved in taking any legal action against the tenant.
The majority of tenants choose to have a pet when renting. From October this year (2022), property investors in Queensland will have less control over whether or not pets are permitted. Tenants will still be expected to request permission, but, owners will need to provide a fair and reasonable explanation to deny their request. Pets can cause damage to properties internally and/or externally. Some insurance policies now pay out larger benefits for damage caused by pets. So it is best to make sure your landlord insurance policy provides the level of cover needed for this.
Speak to an expert
By having an expert property management looking after one of your most valuable assets " your investment property", it can assist you with minimising your overall risk. However, you will need to be aware that the property manager cannot stop a natural disaster from occurring or force any tenant to pay their rent. Ensure you speak with an expert about the landlord’s suitable insurance you need. Make sure you check that your landlord insurance policy covers all of the potential scenarios you require to be covered for and the level of support provided after you make a claim.
DISCLAIMER: House 11 Residential is not a financial advisor institution, we are professional and dedicated property managers. The information provided this blog is to assist you to understand the great benefits of having landlord insurance and it should not be considered as financial or legal advice.