What's typically covered in a landlord insurance policy?
A landlord policy typically comprises a combination of building, contents and landlord insurance.
Property damages from natural disasters (such as fire, flooding and storms) are likely to be covered, as are possessions kepton the rental premises for maintenance purposes, such as tools and gardening equipment.
The landlord component of the policy typically covers loss of rental income if the property becomes uninhabitable. This couldhappen as the result of a covered event, rent default, damage or theft by tenants and their guests, liability in the event of anaccident, and legal expenses, if necessary.
What landlord insurance doesn’t cover are the regular costs associated with being a landlord.
This could include construction defects, normal wear and tear, and ordinary expenses, such as plumber’s bills for clearing drains.
“The landlord component of the policy typically covers loss of rental income if the property becomes uninhabitable”
Paying for peace of mind
Landlord insurance has proven a worthwhile investment for Rodney Holder, whose property portfolio includes a block of units in the central Queensland town of Rockhampton as well as houses in Canberra and Brisbane.
His policy covered the cost of making good the damage caused by one less-than-careful tenant in his Canberra property,including torn curtains, a hot pot burn mark on a newly laid floor and a broken door on a new oven.
“As with any insurance, you’re paying for peace of mind,” Holder says. “It’s also tax deductible and a cost of doing business.”
Other claims can be significantly larger, warns Jo Napoli, the Principal of real estate agency The Rental Specialists.
She recently helped a client evict squatters from their investment property and says the bill for lost rent, new locks, damage to the premises and cleaning came to just under $10,000.
After being provided with a copy of the condition report, tenancy ledger, photographic evidence of the damage and invoices for repairs, the client’s insurer paid the claim within 14 days, Napoli says.
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