Landlord insurance is a type of property insurance policy designed to protect landlords against various liabilities. A standard policy includes the “casualty” policy, which covers against multiple perils, including fire, lightning, theft, water damage, and vandalism.
There's been a surge in popularity for landlord insurance during the past couple of years as landlords realise it's crucial to be adequately insured. It's never been more important than now to have a policy in place to protect your properties and the people in your properties.
Top Five Landlord Insurance Myths
Today, we're exposing the top five landlord insurance myths that we've heard from friends, family, and colleagues and the truth you should know about them.
1. Landlord Insurance Is Expensive
The first myth that we often hear from clients is that landlord insurance is expensive. While this may have been true in the past, it is definitely not the case anymore!
Landlord insurance has undergone the same process that car insurance went through. It used to be relatively expensive because there wasn't enough competition in the market. Today, more insurance providers are entering the market, competing vigorously to offer clients the best deals.
2. It Is Only Necessary If and When the Property Has a Tenant
If you don't have tenants living on your property right now, it's possible that you don't think you need landlord insurance. Unfortunately, you most likely still do.
Most policies don't exclude vacant units and may even require landlords to purchase the policy to ensure that the building is properly insured against unfortunate circumstances.
Any property is prone to damages caused by tenants and other non-tenant-related issues. Make sure that you are well-protected from all of these.
3. The Insurance Does Not Cover the In-Betweens
If you think your insurance would be wasted because of not having tenants between the transition time to another tenant, that is not the case. Similar to previously mentioned, property and services under valid landlord insurance would be protected regardless of the property's occupancy rate.
The landlord can still claim their insurance protection if there is damage or loss during these in-between periods. Make sure to study your contract well as there is a maximum number of vacancy days for the contract to expire.
4. Landlord Insurance Would Automatically Get Transferred to the New Owner
This type of insurance will not automatically transfer to the new owners. It will be terminated when the individual who had the policy stops being the property owner. Landlords may have to start over when transferring the property.
The former landlord may be able to transfer the policy to the new owner, but this may be limited depending on the policy terms. Therefore, any new property owner should apply for insurance.
5. Pet Coverage Is Already Included
It may be a surprise to you, but pet damage and injury-related coverage are not included in most landlord policies.
Most tenants presume that their policies cover this. However, most policies do not include any pet coverage. If a dog bites a tenant and the insurance policy does not cover the pet, you're likely to be on the hook for thousands of dollars in dog-bite related costs.
Conclusion
While it used to be true that most landlords didn't really need insurance, this has changed during the past decade. With more than a quarter of the nation renting, landlords have become more exposed to the risk of lawsuits. Theft and vandalism are also on the rise, and it's becoming increasingly important to protect one's properties.
Here at New Wave Insurance, we're trying to help landlords understand and appreciate the importance of having a comprehensive landlord insurance policy for their property. If you haven't had a policy in place for your rental property on the Gold Coast yet, it's high time to start shopping around. We're here to help!