Landlord insurance can often be considered an after-thought or an add on to building insurance for landlords leasing out property.
Building insurance and home and contents insurance are typical considerations for most homeowners, but leasing to tenants introduces new risk factors, and it is essential to consider landlords insurance when renting out a residential property.
The Insurance Council of Australia recommends that landlords consider all appropriate factors for protecting their premises, assets and often, most critically, the income received from tenants.
Building and contents insurance will normally cover the building against risks like environmental disasters, storms, and fires. It will usually include cover for fixed items in the home, such as installed appliances, carpets and blinds.
Conversely, landlord insurance helps to protect you from financial loss if the property is damaged, either by tenants or their guests, loss of income due to unpaid rent, and if the property is furnished, can provide cover for furniture and appliances not fixed, that would not be included under a contents policy.
In addition, landlord’s policy can also provide protection against accidental damage by tenants, malicious damage to the property by tenants, theft of property and loss of rent if the tenant absconds without paying the rent.
2020 showed the uncertainty that comes with rental tenancies – while many workers were unable to earn as usual, mortgage repayments didn’t stop. The period showed that policies that included tenant default cover, despite the moratoriums, were eligible for cover when tenants were unable to meet their rental repayments.
Specialist policies, including Eagle Protect, also provide cover for damage by tenants’ pets (with limits), exploratory costs, which can assist in determining the cause of damage, drug lab clean up, reasonable reletting expenses to assist you in finding a new tenant and even changing the locks if your tenant hasn’t returned them.