The Importance of Landlord Insurance

As Real Estate agents we have a duty of care to ensure our clients are aware of the risks they may be exposed to when owning a rental property. We therefore recommend all of our clients do their research to find a comprehensive landlords insurance policy that suits their needs.

Some important areas to look out for in landlords insurance coverage include;

• Loss of rent cover – How long does the cover last and under what circumstances the policy will cover this.

• Accidental damage – How much the cover is, and what is considered accidental.

• Malicious damage – How much the cover is, under what circumstances, is a police report required.
• Excess amount and how many are payable depending on the situation (Some policies will charge multiple excesses for different items, even if they all happened at the same time).
• Is pet damage included – whether the pet is approved or not.
• Fire and flood damage  – How much is covered, under what circumstances.

Although we are not experts in insurance, being in the Property Management industry has exposed us to what we see as deficiencies in many widely used policies.

Did you know that some policies:

• Will not pay the first 4 weeks rent loss and then have an excess on top of that.
• Will not pay claims if a Tenant is on a periodic lease or lease continuation.
• Will not pay claims where a Tenant has applied to the court on hardship grounds.
• Will not pay Tenant damage without a police report.
• Will not pay Tenant damage unless it can be proven that the Tenant did it with malicious intent.

It is important to remember that Owners Corporation insurance (applicable to apartment buildings), will only cover building related items and not contents items (such as carpet, paint, blinds, floorboards ect). This is another reason why a landlords insurance policy is also needed.