Why landlords need insurance

landlord's insurance

More than ever owners should have landlord insurance.

With unemployment and mental health issues on the rise we are seeing greater losses of rent and damages being suffered by owners. Landlord insurance is something all investment property owners should seriously consider. While we work hard to ensure every tenancy is a success, the volatile climate we now live in makes this hard to predict. It’s important to plan as best you can for these unexpected events.

If you own an investment property, there is always a chance that you may experience problems with property damage or tenants not paying rent ¬- both of which can seriously affect your finances. Standard house insurance policies, generally won’t cover damage caused by tenants or the non-payment of rent. An easy way to protect your property & rental income is to have landlord’s insurance.

A recent claim submitted to SGUA by Rentwest shows how the right insurance can protect your income:

Tenants moved into a brand new property. On vacating it was found that they had re-painted throughout, without permission, the blinds were damaged and had missing slats and a single brick had been removed from an outer wall.

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However, not all policies provide comprehensive cover and if you drill down into the details you may find you have either no cover at all or a hefty excess, leaving you significantly out of pocket.

Unfortunately, some owners have found out they had restricted cover or no cover at all, when it came time to make a claim, leaving them concerned and very disappointed with the outcome. If the same Owner had been insured elsewhere the outcome would have been quite different:

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SGUA has been specialising in providing Landlord insurance for nearly 25 years, providing protection against financial loss. For clients of Rentwest, the annual cost to insure your Rental income & Contents to the premises is $230, and as a tax-deductible expense, it makes perfect sense to ensure that your investment property is protected. If you are comparing your cover, check that you have the following:

Malicious, Intentional, Deliberate Damage
One of the biggest expenses an Owner may face if not insured is caused by Tenants who maliciously damage the property. This damage can be extensive and can be spread through the entire house. Much more commonly seen than the malicious variety is Deliberate & Intentional damage, and whilst not vindictive, can be substantial and very costly to put right.

SGUA provides up to $60,000 of cover – Excess free

Accidental Damage
While the majority of tenants don’t set out to cause damage, accidents do happen, just like they happen in your own home. Accidental damage is defined as a sudden unexpected event which is unforeseen and unintentional.

You are covered for up to $60,000 – $250 excess per event (capped at two)

Legal Liability
As an owner of an investment you are exposed to the possibility of personal injury claims. The abundance of “No Win – No Fee” legal services, has made making a claim easier. Whether you are found liable or not, the costs associated in defending against the claim can be significant

Our policy covers you for up to $20 million in liability cover, which includes the payment of damage awards, as well as lawyer fees and costs incurred against lawsuits.

Rent Default
Your Property Manager is a trained professional who actively seeks to place trustworthy tenants in your property. However, even with the best of care, things can go wrong. Tenant’s situations can change. Events such as illness, loss of a job and marital breakdowns can cause even the best of tenants to struggle to meet their obligations.

We cover up to 15 weeks of rent for any tenant rent default situation including absconding tenants, failure to pay rent, tenant hardship, death of a sole tenant and more – all completely excess free.

Loss of Rent
Recent natural disasters in Australia have highlighted the need for this type of cover. Many properties have been severely damaged in recent times by fire or flood. Damage can also arise from a range of events such as Fire, storm, burst pipes and more. Tenants are immediately and automatically released from their obligations if the property becomes uninhabitable. The loss of rental income can quickly become a financial issue for the landlord.

Where an insured property is damaged by an insured event to the point where it is uninhabitable, we cover the loss of rent for up to 52 weeks – Excess Free. We also cover loss or damage to your Landlord Contents including fixtures and fittings – up to $60,000 with an Excess payable of $50

Applying for cover is easy, download the application form or ask your Property Manager to arrange. For further information about how we can help protect your property, call our friendly team today or visit our website to find out more. We can also insure the building and Holiday homes/units – get a quote on-line. The above is a summary only, for full details of this policy please refer to the Product Disclosure Statement available on our website: sgua.com.au