Insurance, What Insurance?
Why landlord insurance is an expense you will not regret
According to Finder, landlord in insurance costs an average of $208 per month for a property worth $1 million. This amount can increase or decrease depending on the value of the property. Once it is tallied up for the year, your landlord insurance will probably be one of your larger ongoing expenses (if you have not had to make major repairs). So, is it worth having landlord insurance if it can seem like such a big cost? The answer is yes, especially when you think about the value of the asset you are insuring and the potential scenarios where landlord insurance can provide cover.
In this article, we outline what kinds of scenarios landlord's insurance may cover.
When your tenant's circumstances change
You may have experienced this when the COVID-19 pandemic hit. If your tenant's circumstances change, they may be unable to pay their rent of 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. For short-term and holiday rentals where the vetting process may be less detailed, landlord's insurance can be particularly important.
Accidents and natural disasters
In the event of an unexpected natural disaster or a significant accident that extensively damages the property, landlord's insurance provides a safety net to ensure the necessary repairs can happen and mortgage payments continue. This may cover events such as major water leaks and broken pipes, fires, floods, and hurricanes.
Damage caused by pets
More tenants are choosing to have a pet today. And while many are cute, pets can cause damage to floors and gardens. Some insurance policies have responded to this trend and now pay out larger benefits for damage caused by pets. Make sure your policy provides the level of cover you need if your tenant has or decides to get a pet.
Do your research and speak to an expert
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
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.