Maintaining an investment property includes finding a good tenant and covering all the expenses that your property needs. Securing landlord insurance can help protect you against the risks of unforeseen damage repairs and potential loss of rent. However, keep in mind that this policy is not the same as home insurance or contents insurance. Regardless, investors need to keep an eye on this one.
In this article, we will be discussing everything you need to know about landlord insurance and what it can do for you.
What Is Landlord Insurance?
The term landlord insurance refers to an insurance policy type that is mainly used by investors who rent out properties. This policy’s inclusions will differ based on the type of premises you're renting, the provider, and the level of coverage you choose. For a brief overview, the following factors are the insurance’s scope of coverage:
Structure and Contents
These two terms are usually paired together, but you can have them separately in your policy. For your information, the structure or building insurance covers fire, floods, vandalism, and theft damages. On the other hand, contents insurance covers any detachable items owned by the landlord.
Public Liability Insurance
This policy type usually covers damages made to visitors who have seriously injured themselves inside the building.
Tenant-Caused Damage
Some tenants might cause serious damage to the property. However, emphasise what is covered in these types of damages so that it is not confused with other intentional damages such as theft and vandalism.
Areas Prone to Disaster
When disaster strikes and makes a building unlivable, property owners in flood- or bushfire-prone areas should make sure that they have sufficient insurance coverage to cover damage to specific units. Keep in mind, though, that this may come at a higher premium since insurance companies will want to pay attention to these high-risk areas.
Rent Default or Other Rent Loss
There are various reasons for rent loss, such as failure to meet rental payments, death of the tenant, and eviction of the tenant as mandated by the court.
Lock Replacement
Some tenants leave with your keys once they move out of the unit. In this case, it’s best to replace your locks immediately to prevent them from entering the unit without permission.
Management Liability Insurance
This policy is intended to safeguard investors from numerous dangers that individuals claim are the landlord's fault. If the claims are found to be the consequence of their negligence, the management liability insurance will cover the ensuing expenditures automatically.
Other Legal Expenses
Should you evict a tenant due to a court mandate, you will need to incur fees for your legal representation or make a legal claim for rental loss.
Conclusion
In the long term, your property may sustain unanticipated damage due to various reasons. That is why it is critical to take the proactive step of purchasing landlord insurance. You won't have as much trouble coping with financial hazards, which can lead to bankruptcy if not managed appropriately. Remember the terms listed above so that you know which type of landlord insurance coverage you'll have.
If you’re in need of a reliable Gold Coast insurance specialist, connect with New Wave Insurance today. Let us help you decide on the right landlord insurance for your business. Call us for a free quote!