In our discussions with a landlord prior to taking on management of their investment property, we always ask whether landlord insurance has been arranged. In what can be a hectic time finalising a property for rent, this critical insurance can sometimes be overlooked.
It is essential. Let's find out why.
What is landlord insurance and what does it cover me for?
First, let's cover off what landlord insurance actually is. Landlord insurance is an essential insurance cover for a landlord, covering many aspects of their investment property beyond typical home and contents insurance products.
For a relatively small cost, a landlord can have coverage for damage to buildings and contents as well as for rental default and damage by tenants.
For example, landlord insurance typically covers the landlord for the following (and much more):
The above points are a sample of what landlord insurance provides coverage for. We've seen countless instances where landlord insurance pays for itself many times over, when the unexpected happens.
How much does landlord insurance cost?
A good overview of the average landlord insurance premium costs across each state are outlined below, as sourced from Canstar.
Does landlord insurance cover the tenant's goods?
Importantly, landlord insurance will generally only cover items owned by the landlord, not by the tenant. This is an important distinction, and one which we educate each new tenant on as they commence their lease.
Research by the Insurance Council of Australia found that 74 per cent of renters do not have contents insurance. Worse still, they are twice as likely to need to make a claim for theft or burglary.
Many renters are of the incorrect understanding that their landlord is insured, therefore they don't need to be. Not true! We try to ensure our tenants are aware of this and take up appropriate cover before it's too late and they actually need it.
What are the most common landlord insurance claims?
According to leading landlord insurance provider Terri Scheer and various other sources such as domain.com.au and canstar.com.au, the most common landlord insurance claims are for:
When should I get landlord insurance?
Generally, landlord insurance should be taken as soon as you have purchased the investment property. Remember, cover can be started at any time but can't be backdated. As a landlord you have liability exposure from the time you or your property manager begin showing potential tenants through the property.
How do I set up landlord insurance?
Of course, you are able to compare many landlord insurance providers online yourself and determine which suits your needs.
Alternatively, we are able to assist you with establishing landlord insurance for your investment property. Contact us today and we'll happily work through the next steps with you.
About Carnelian Property Management Newcastle
We are a family-owned and run Newcastle business. We’re landlords. We’re home owners. We’ve also been long-term tenants. We are refreshingly accessible with intimate knowledge of the greater Newcastle, Lake Macquarie and Fern Bay rental markets.
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