Australians are renting homes from property owners now more than ever before. With house prices rising and making homeownership harder to achieve — people are being left with little option other than to rent.
Recent ABS statistics show that 31% of households are currently leased from landlords. And this is a rate set to increase each year.
This surge of rental properties is seen all over Australia. For landlords, this is good news.
Managing a rental property can be a great investment opportunity but it also comes with its slew of risks and demands.
From finding reliable tenants to keeping on top of legislation, there is a lot to think about.
One of the most important points you need to consider is how to protect your investment against future loss or damage.
The safest way to protect your property is to take out landlord insurance.
At Calibre, we pride ourselves on offering our landlords only the most helpful information.
Let us share with you how to find the best landlord insurance policy for your property.
Defining Landlord Insurance
Simply put, landlord insurance is the kind of insurance that covers rental properties. It is taken out by the landlord and serves to protect your property during occupancy by a tenant.
Landlord insurance is available for rental properties of all types, sizes, and locations.
Types of Landlord Insurance
Loss of Rent/Income Protection
Income Protection protects you if a tenant either fails or refuses to pay rent.
Income provisions in your landlord insurance policy will sometimes come bifurcated. This is where the tenant is, for whatever reason, unable to make further payments.
Then there is the second provision. This one protects you in situations where there is no further income from your property for reasons other than defaulting.
These may include:
● Unforeseen repairs and renovation that render your investment property temporary uninhabitable
● Tenants vacation notices that jeopardise long-term financial plans
Landlord Building Protection
Landlord Building protection typically covers physical loss or damage. This involved damage to the building structure you’re renting out.
Such events may include:
● Smoke and fire damage
● Earthquakes, sinking & subsidence
● Floods and tsunamis
● Theft, burglary & intentional vandalism
● Cyclones, hurricanes, and other natural events (acts of God, if you will).
● Accidental & malicious damage to piping or electrical systems.
Landlord Contents Protection
Landlords contents insurance covers the cost needed to replace or repair damaged items inside rental properties.
It can be bought as a policy separate from either of the other three types of landlord insurances, or as a constituent feature of a comprehensive insurance package.
Items include those that are not nailed down, but for which the tenant is not responsible. Such as:
● Furnishings — blinds, carpets, and curtains
● Electronic items — ovens, alarm systems, laundry machines
Landlord Liability Protection
Landlord Liability protection covers other types of loss, damage, or injury.
They will include features that are typically included within other kinds of insurance. They cover secondary costs resulting from disastrous events that led to a claim. This includes:
● Medical — Cost cover for tenants should they sustain an injury
● Legal Liability— For when a tenant feels aggrieved enough to sue over loss or injury
Things to Consider When Choosing a Policy
Is It Within Your Budget?
Different companies offer their policies at different rates. Even for policies that have the same limits and provisions.
Landlord insurance premium costs will range anywhere between $120 and $300.
For a better indicator of how much your policy will cost, you need to consider certain elements.
For this, you will need to pay attention to the factors that affect insurance premiums. They include:
● Claims history
● Property’s location
● Condition of your rented home
● The total valueof insured items
● Area crime index
● The renters’ profile
● Your desired level of cover.
● Your locale’s climate risk index
Are There Additional Features in The Policy?
Many insurance companies will include additional provisions in your contract. They might cover key damage, car protection, rent guarantee, and home emergency. These are usually good incentives for picking one policy over another. Particularly if they are offered at no cost.
What Is the Company’s Claims Procedure?
More to the point, do they have an honest record of implementing their claim as per their contract?
Understanding your prospective company’s claim procedure is important. It will prepare you for when the time comes to make a claim.
Everything will usually be detailed in the product disclosure statement.
A disclosure statement elaborates on the contractual terms, conditions, and rules.
As well as objectives, financial situation, or needs between the policyholder and the company.
Which Is The Best Landlord Insurance Policy?
We assessed the landlord insurance policies of the best-reviewed policies.
All the companies were assessed in terms of the cost of the policy and specific benefits offered by each company’s policy
Landlord Insurance Policies by Premium Costs, Cover Rates & Limits
You’re All Ready to Go
Landlord insurance might seem like an unnecessary addition to your already long list of expenses.
But, when considering the risks you may be exposed to as owner and manager of a rental property, you have to think of it as a safety net.
Here at Calibre, our team of passionate property managers aim to offer landlords only the most valuable advice. For a chat about how we can help, get in touch on 07 3367 3411.