Under insurance across the Australian property industry is rife. In fact, in 2005 the Australian Securities and Investments Commission (ASIC) estimated that an astonishing 70 per cent of homes did not have sufficient insurance.
If you are a landlord looking to make maximum returns on your property investment, the right landlord building insurance (and enough of it) can keep you in the black should you require significant repairs down the line.
Landlord insurance covers both residential properties, such as apartments, and commercial properties, such as offices and factories. It differs from standard home insurance in that it offers protection against:
Theft by the tenant or their guests
Malicious or intentional damage to the property by the tenant or their guests
Loss of rent if the tenant's unable to make their payments
Liability - including if your tenant makes a claim against you
Legal expenses incurred when taking action against a tenant
The premiums associated with landlord insurance are typically higher than those you're used to insuring your own home. However, they're nothing compared to the cost of replacing and repairing things in your uninsured rental property should your tenant turn out to be far from perfect. There are bargains to be had, so be sure to shop around.
Insurance for landlords can be tailored to suit your specific needs. Some are comprehensive, while others will serve as a bolt-on to a typical home and contents or strata title policy. If you're renting out your property partially or fully furnished, it's imperative that your policy cover you for contents of the property.
It's also key as a self-managed landlord to protect your investment by following property management procedures to the letter - like having a signed rental agreement, screening tenants' rental and employment histories, and conducting regular inspections.
The information contained in TenancyCheck.com.au website is general information only and does not constitute legal, financial or compliance advice. As the laws relating to tenancy agreements may have changed we recommend you check with the relevant State or Territory government department. We also recommend that you obtain your own independent legal advice about matters relating to landlord obligations, tenant rights and any legal disputes you may have with a tenant(s).