Landlord Insurance

A specialist landlord insurance policy is designed to cover the unique risks that investment properties may face. Not sold on the idea? Here are five reasons why a specialist landlord insurance policy is a valuable investment…

1. Added Protection

Unlike a typical home and contents policy, a landlord insurance policy offers protection for renter-related loss and damage. This means if a renter defaults on rent or causes damage to the property, property owners may be able to recoup costs through their insurance policy.

2. Weather – it is just so unpredictable

Damage caused by weather events is a common property insurance claim, and by taking out cover, property owners can safeguard their investment against a range of natural disasters and risks including storms, hail, floods, cyclones, and bushfires.

3. Renter-related risks

You cannot control a renter’s job loss, relationship breakdown, or health. Around half the claims against landlord insurance policies concern a renter-related matter. Our rental providers have experienced loss of rent (through Covid or renter retrenchment), physical damage to the property, extensive clean-up and rectification following a death in the property, to name a few issues. Fortunately, investors who have landlord insurance will usually be protected from these risks.

But isn’t the bond enough to cover renter-related risks? This is a common myth. The bond amount is limited by legislation and, in many cases, will not be enough to cover the expenses if a renter refuses to pay rent, damages the rental property significantly and fails to repair the damage, or steals contents from the premises. This leaves the property owner to foot the bill and then chase the renter for reimbursement through the courts, which can be an expensive proposition.

4. Cover up to tens of millions of dollars

A key feature of landlord insurance policies is legal liability and cover limits are usually in the tens of millions of dollars.

Property owners have a responsibility to provide a safe and liveable property for renters and anyone else who visits the premises. This means they must take care to avoid foreseeable harm to renters or other visitors. Harm could be a physical injury or damage to the person’s property. If the rental provider is negligent in this responsibility and someone suffers a loss as a result, the property owner will usually be held liable and may be required to pay compensation.

5. Legal costs are covered

Speaking of legal costs…. This cover is important for property owners who want to always keep control of their property. While we hope your tenancy is a breeze, if something does go wrong, there can be lengthy and costly legal disputes. When a renter does the wrong thing, you may need to go to court to sort out disagreements. If this happens in relation to loss of rent, property owners can benefit from having cover that extends to legal expenses.

The bottom line – as a property owner, it is important to protect your asset and the income you are set to derive. A specialist landlord insurance policy is an important part of an investment strategy. There are several providers with differing pricing and coverage, so when you review their policies, it is important to consider that some provide inferior coverage compared to others.

This article is based on information provided by the team at EBM RentCover, one of LongView’s accredited providers. EBM RentCover is one of Australia’s leading landlord insurance providers, protecting more than 165,000 rental properties across Australia.

While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation may impact the accuracy of this article. You may contact EBM on 1800 661 662 or https://www.rentcover.com.au/insurance/landlord if you have any questions.