Discover the different types of insurance that are available for landlords.
Building and contents insurance
Vital for every property owner, building and contents insurance covers the property’s bricks and mortar, as well as unfixed items within the building. It’s possible to get separate policies for the building and its contents, but typically these are joined together under the one policy. Your building policy should cover things like theft, fire, storms and subsidence. Contents insurance covers the cost of replacing household items like furniture, appliances and jewellery.
What to look for: Building and contents insurance policies can vary widely in both coverage and price. Take into account excesses and any exclusions to ensure you’re covered in the long run. It’s also worth valuing your belongings and calculating the real cost of rebuilding or repairing your property – this way you won’t end up underinsuring your property and belongings.
There are specific risks associated with owning a rental property, many of which aren’t covered by standard building and contents insurance policies. Landlord insurance is therefore one of the most important purchases a landlord can make. It is designed to protect investors against risks such as accidental and malicious damage by tenants and rental defaults.
What to look for: Not all landlord insurance policies are the same. Some are designed to be taken out on top of a building and contents policy. Others are more comprehensive and may include building and contents cover (particularly important if you rent out a furnished property).
Contrary to popular belief, landlord insurance doesn’t cover the tenant’s property. Prudent landlords should encourage their tenants to take out renter’s insurance, as this typically provides coverage for a tenant’s personal property, damage to the home caused by a covered loss and personal liability.
What to look for: Premium discounts may be available if tenants install alarms, smoke detectors and fire extinguishers. Retired tenants who are over 55 could also be eligible for additional discounts.
All apartment owners require a strata insurance policy. This is often conveniently bundled in with the apartment complex’s building insurance and the body corporate manager will generally handle this for you. Under a strata title, the body corporate is legally responsible for the building’s insurance and the owner’s liability for common areas on the property. This includes things like gardens, walkways, roofing and external walls.
What to look for: Despite the coverage offered by strata insurance, apartment owners still need to organise landlord and contents insurance. This way you’re covered for all other risks that may occur inside the actual apartment, such as a tenant or visitor injuring themselves or damaging the property.
Expert property management
There are other ways you can insure yourself against stressful and costly problems. Hiring an expert property manager is one of the best ways to protect your property. Not only do they manage tenant relationships and conduct regular inspections, they also organise maintenance and repairs and ensure that your property remains in top condition.
For more information, contact property management specialists K.G. Hurst today.
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