Regardless of whether you're self-managing one rental property or ten, landlord insurance offers you added protection should the unforeseen occur.
Insurance tailored to landlords is markedly different to the standard house insurance policy that's required when you're a tenant or owner-occupier. It offers protection should your tenant prove themselves to be far from ideal by defaulting on their rent, causing damage to your property, or abandoning it without notice.
Many self-managing landlords are so focused on getting the greatest possible return on investment, they lose sight of how easily their valuable asset could become a money-pit minus insurance. While cutting out landlord insurance may benefit your bottom line in the short term, all it takes is one bad tenant causing intentional damage to tip you into the red.
So how does landlord insurance differ from a standard home building insurance policy? The latter typically doesn't offer protection against either malicious or intentional damage by tenants or failure to pay rent. The former commonly protects Australian landlords 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
Insurance for landlords is far from one-size-fits-all. Some are comprehensive, and will cover all your insurance needs, 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).