As property managers, we’re often asked the question – Do I need landlord insurance? The short answer is, yes. When we are talking about an asset as valuable as an investment property, landlord insurance is an absolute must. There are a number of scenarios in which you will be relieved you have taken out landlord insurance and in this article, we take a look at some of those.
When your tenant’s circumstances change
Tenants circumstances can change for an array of reasons – loss of job, relationship break ups, health etc. If your tenant’s circumstances change, they may be unable to pay their rent or they may not look after the property as well as they always have. Depending on your policy, you can get cover for loss of rent, property damage (accidental or deliberate), content’s cover for belongings provided by the landlord and the cost of taking any necessary legal action against the tenant.
Accidents and natural disasters
In the event of an unexpected natural disaster or a significant accident that extensively damages the property, landlord insurance provides a safety net to ensure the necessary repairs can happen and mortgage payments continue. Examples of these types of events would be major water leaks, storm damage, fires and floods.
Damage caused by pets
A large percentage of tenants choose to have a pet these days. Sometimes pets can cause damage to properties both inside and out. Some insurance policies have responded to this trend and now pay out larger benefits for damage caused by pets. If your investment property is suitable for pets, make sure your policy provides the level of cover you need.
In rare circumstances, a tenant will cause damage to a property on purpose. It can be stressful enough that your property has been damaged maliciously, so it is important to make sure you have the right coverage for should you be faced with an unfortunate situation such as this.
Do your research and speak to an expert
Obviously having expert property management looking after your investment can assist with minimising your overall risk, however your property manager cannot force a tenant to pay rent or stop a natural disaster from occurring. Make sure you speak with an expert about the landlord’s insurance you need. You’ll need to check your policy covers all of the potential scenarios you’d like to insure against, the process and ease of making a claim if needed and the level of support provided after you need to make a claim. These factors may also influence your premiums, so it’s important you pick a provider that will give you the level of service and support you need in the event you need to make a claim.
We aren’t financial advisors at Revolve Property, we’re just excellent property managers. We’ve provided the information in this article to help you understand the benefits of landlord insurance, but it should not be considered financial or legal advice. We recommend talking with a financial advisor before making any investment decisions. Our mates at Inception Wealth Group would be happy to help you out and you can request a call here.