Investor
Landlord Insurance
17-Jan-2017
Over the last couple of years we have had the need to make claims against our landlord insurance policies to recover losses. Many of our owners have been very glad they had the cover of the insurer but in some cases the owner of the property concerned has been left very disappointed with the service of their insurer and the eventual outcome.
Each insurance company differs with the way they deal with claims and just as important the items covered under the policy. Landlord insurance has been a boon for insurers but, like real estate agents, not all are created equal.
It is really important that every investment property owner considers taking out landlord insurance. However, if you are contemplating doing this please compare the cost, excess applicable and the type of risks which are covered.
The most important risks that should be covered include loss of rent – due to malicious damage, absconding tenants, default payments due to eviction, tenant hardship or death. The death of a tenant is tragic but most owners don’t think of the many costs and complications that are associated with such an event, for example how will the rent be paid, and how long will it take to have the property available to re-rent and in the meantime who will pay the rent.
Loss or damage to your contents which would include floor coverings, light fittings, window coverings, and any furnishings. This should include accidental loss or damage as well as malicious or deliberate damage caused by the tenant, tenant’s family or any of their invited guests.
Loss or damage to your building including accidental, malicious, deliberate and theft or damage caused by attempted theft by the tenant, tenants family or invited guest.
Two additional items that are quite often not included in all policies but should be are representation costs – this covers your costs for your property manager to represent you at tribunal for the purpose of obtaining an order against the tenant for rent arrears. The other expense that should be covered is the cost to change the locks which can work out very expensive, so investigate the policy, to ensure is this item is covered.
Legal liability is a must and should be for a minimum of $20,000,000 and last but not least tax audit, this should cover you for professional costs.
The cost of landlord insurance, in the majority of cases, would be fully tax deductible.
If you would like to know more about Landlord Insurance, please call the Newton Property Management team on 02 9524 0777 and we would be happy to discuss this further.
Each insurance company differs with the way they deal with claims and just as important the items covered under the policy. Landlord insurance has been a boon for insurers but, like real estate agents, not all are created equal.
It is really important that every investment property owner considers taking out landlord insurance. However, if you are contemplating doing this please compare the cost, excess applicable and the type of risks which are covered.
The most important risks that should be covered include loss of rent – due to malicious damage, absconding tenants, default payments due to eviction, tenant hardship or death. The death of a tenant is tragic but most owners don’t think of the many costs and complications that are associated with such an event, for example how will the rent be paid, and how long will it take to have the property available to re-rent and in the meantime who will pay the rent.
Loss or damage to your contents which would include floor coverings, light fittings, window coverings, and any furnishings. This should include accidental loss or damage as well as malicious or deliberate damage caused by the tenant, tenant’s family or any of their invited guests.
Loss or damage to your building including accidental, malicious, deliberate and theft or damage caused by attempted theft by the tenant, tenants family or invited guest.
Two additional items that are quite often not included in all policies but should be are representation costs – this covers your costs for your property manager to represent you at tribunal for the purpose of obtaining an order against the tenant for rent arrears. The other expense that should be covered is the cost to change the locks which can work out very expensive, so investigate the policy, to ensure is this item is covered.
Legal liability is a must and should be for a minimum of $20,000,000 and last but not least tax audit, this should cover you for professional costs.
The cost of landlord insurance, in the majority of cases, would be fully tax deductible.
If you would like to know more about Landlord Insurance, please call the Newton Property Management team on 02 9524 0777 and we would be happy to discuss this further.