If you’ve worked hard to buy and maintain an investment property, the last thing you need is the stress and expense of damage or unpaid rent. Like any property, a rental property should be insured. But as a landlord you may have some additional risks that you ought to be aware of and protect yourself against to safeguard your assets and income.
You may think that landlord insurance is an unnecessary cost, but having the right cover can save you thousands in the unfortunate event of an emergency. It’s simply a matter of working out what your specific risks are, and finding the best insurance to cover you.
The kinds of risks faced by landlords are all the usual ones faced by home owners, like fire, flood, storm damage and theft. But landlords should also think about the possible losses caused by tenants such as rental default and damaged property. Luckily all of these risks are insurable.
Some key risks to look for in landlord insurance cover are:
· Natural disasters like storm, fire, flood and earthquake. Note that some policies won’t cover particular types of flooding such as from rivers bursting their banks.
· Complete or partial destruction of the property.
· Public liability cover for costs associated with someone’s injury or death that is attributable to landlord’s negligence.
· Accidental or malicious damage caused by tenants and their guests, and theft of your property by your tenants.
· Loss of your income due to property damage that means you cannot lease out the premises, due to tenants defaulting on their rent, eviction, or due to tenant hardship (ie if a court releases your tenant from their obligations to pay rent due to illness, injury or other serious hardship). Cover varies between insurers and may be capped, or might only start after a certain time period, so be sure to arrange cover that suits your needs.
· Legal costs if you have to take action against a tenant. This type of cover may require you to pay an additional premium.
As with any other kind of insurance, the key thing is to make sure you’ve got the right level of cover for your needs and particular risk profile. Don’t assume you’ll automatically be covered for all emergencies!
Familiarise yourself with your policy, and take time to review it regularly to make sure it really still is relevant to your own particular circumstances.
Building vs Contents Insurance
It’s important to note that landlords, like other homeowners, should consider insuring contents, and not just the building itself. No, we’re not talking about the furniture or appliances within the property, but the carpets, kitchen interior, light fittings and curtains. These features are often the major upgrades and investments made by landlords, and greatly contribute to the earning potential of the property. It’s not worth personally risking replacement costs in the event of damage.
When it comes to choosing landlord insurance, you should note that the cheapest insurance won’t always give you the best cover, so make sure you think about your particular needs and look closely at the policy.
If you’d like to find out more about Landlord Insurance through ACS, you can click here to begin an online quote process, explore your cover options and choose exactly what you need.