Landlord insurance provides important protection

Whether you own an apartment, townhouse, or house, you should consider residential landlord insurance for your investment property.
You can insure your:

• Building
• Landlords’ contents / fixtures & fittings, and
• Liability
• Loss of rent
• Rent default & theft by tenants
• Strata title mortgagee protection.

Buildings need to be insured for their full replacement value. The cost of rebuilding your home is not the same as its real estate value. This link may assist you in calculating the sum insured of your home.

Landlord Insurance Contents, Fixtures & Fittings include any household goods such as carpets, curtains, internal blinds and any other furnishings that are not built-in.

If you are found legally liable for loss or damage to someone else’s property, or death or physical injury, Liability insurance will cover you. This is insurance that no landlord should be without.

Loss of Rent allows you to claim for lost income if the home cannot be lived in due to fire, storm or other event.

The Rent default & Theft by a tenant section will allow you to claim for losses & expenses exceeding your bond, resulting from:

• Your tenant leaving before the end of lease without giving notice
• You having to legally evict your tenant
• Your tenant ceasing to pay rent owed
• Theft by a tenant or their visitors

Options for home and contents insurance

Generally there are two different home and contents policies available – “Accidental Damage” and “Defined Events” (or “Insured Events”).

Accidental Damage
This type of policy covers any accidental loss or damage to your property, unless specifically excluded.
Accidental Damage is the more comprehensive cover option. It insures a wider range of circumstances than a Defined Events policy (including the accidental breakage of an expensive object). Accidental Damage policies also contain higher policy limits and allowances.

Defined Events
Common defined events noted in the policy include:

• Fire
• Theft
• Storm
• Lightning
• Explosion
• Accidental breakage of glass
• Malicious damage
• Earthquake
• Impact
• Flood (note – not all insurers cover flood, and some insurers that offer flood will allow you to opt out. If you live in an area with flood risk, check your coverage to make sure it meets your needs).
• Liability

Both policies automatically include personal Public Liability cover. Public Liability covers you for legal costs and compensation you may be legally liable to pay, as the result of an occurrence in which you were found negligent, and caused personal injury or damage to the property of a third party.

How Much Do I Insure For?

The most common type of insurance is to cover most items for “new for old”. This is also known as replacement value. The replacement value of your home is not the same as its real estate value. It is important that the sum insured you select represents the full replacement value of your home and contents. This link may assist you in calculating the sum insured of your home and contents.

Specified Valuables & Contents

Insurers insist that valuable items are specified on the policy so that they are insured for their correct value. This includes jewellery, gold or silver articles, paintings, works of art, antiques or furs. You should list special collections separately.

Some contents have maximum cover limits, unless the items are individually specified. Some examples are: home office contents, money and negotiable documents, tools of trade, and spare parts for motor vehicles or motor cycles. Each insurance company has its own limits, which they will detaile in the policy document. Credence Insurance can assist you to identify and correctly insure these types of contents.

Margo Goodall from Credence Insurance wrote this article.

Credence Insurance will help you select the right Landlords or Home and Contents Insurance solution to meet your needs. Call (02) 6282 2100 to speak with one of our Account Managers.