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  • Amanda Bird

The Significance of Investing in Landlord Insurance

Landlord insurance is vital to protecting your investment when you buy an investment property. Finding a reputable tenant and determining what kind of insurance the property needs are two first steps after buying an investment property.

You may be able to get landlord insurance to cover unexpected repair costs due to an insured incident, as well as prospective rent loss if the residence is uninhabitable. If your property is damaged or destroyed unexpectedly, you and the lender are better financially protected.

Understanding Landlord Insurance

Your investment property will be safeguarded against the loss of rental income if you get landlord insurance. Fire, storm, and flood are all insured calamities, and the insurer may or may not cover damage or theft caused by tenants.

Comparing Landlord Insurance VS Rent Default and Loss of Rent

The news is full of stories about tenants trashing a home. They also have to deal with the additional stress of going without rental money for weeks or even months.

If your building is deemed uninhabitable due to a covered loss or damage, or if your only renter passes away, you may be covered under your landlord insurance policy. Checking with your insurance first is a good idea due to the wide range of coverage options.

A rent default is distinct from a loss of rent that occurs due to an insured catastrophe and may be elective.

When tenants fail to pay their financial obligation or vacate your rental property without notifying you, landlords may feel frustrated. When a tenant vacates your rental property without warning, gets lawfully evicted, or stops paying their rent, rent default insurance can provide you with financial security while you search for a new tenant.

Having a written lease in place is critical, as is paying a bond equal to four weeks' worth of rent, as this may be a requirement of your insurance coverage. Before purchasing, you should check your landlord insurance policy's Product Disclosure Statement (PDS) to determine if rent default and loss of rent coverage are included and if there are any applicable conditions, limits, or exclusions.

Protecting Your Property from Tenants

While most tenants try to do the right thing, accidents can happen. If your washing machine hose ruptures and floods the ceiling of your flat, you might be looking at thousands of dollars in repair and replacement costs for something that started as a simple backyard cricket game.

There are several reasons to consider landlord insurance that covers broken glass, flooding, and general liability. Check your policy's PDS to see if the coverage is appropriate for you.

Getting Enough Coverage

A landlord insurance policy may cover some of the following things: tenancy cover, damage or theft brought about by tenants or their guests, loss of rent, rent default, and the legal costs of suing tenants.

There is also coverage for structural damage resulting from various natural and man-made events such as lightning strikes and tornadoes, vandalism, vehicle crashes, and water damage.

In addition to those risks, it may also be possible to get landlord insurance coverage for smoke and fire damage, burst water pipes, and damage caused by pests such as termites. Condominium owners may be able to get coverage for mold damage, but apartment building owners aren't as likely to have this option.

Since there are different risks to prepare for, purchasing an appropriate landlord insurance policy is crucial to protecting your invetsment.

Conclusion

To invest in real estate, you should strongly consider landlord insurance. Though it is possible to sell your home without coverage, there are comprehensive policies available that can assist with protecting your investment.

Do you need landlord insurance to protect your investment? New Wave Insurance in the Gold Coast, QLD, can assist you in locating the appropriate insurance for your assets, business, and cars. Contact us right now!

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