There is always a risk of unintentional or spiteful damage to your property that can land you in big trouble. No matter how thoroughly you have evaluated your tenants.
Landlord insurance provides financial security to property owners and covers them against unexpected events that can impact their investments.
This blog will help you understand landlord insurance - what protection it offers- tips to find the best one- and answer some basic questions.
1. What Is Landlord Insurance In Australia?
Landlord insurance is an insurance policy for property owners who lease their property. This insurance applies to all property types, including a house, an apartment, a tent house, or a unit.
Landlord insurance offers three main types of covers:
Thus, based on your chosen cover, your landlord insurance will protect:
Only the property building
Only the property contents (permanent fittings and furnishings)
Property contents, as well as the building from a variety of insured events
Though it is not compulsory to have this insurance in Australia, it is a wise investment that covers a landlord’s rental property against the most common risks.
2. What Does The Landlord Insurance Cover?
The coverage you get from landlord insurance depends on the type of premises you are renting out, your insurance provider, the chosen level of coverage and the type of your policy.
Here is a general list of things that cover your policy:
Default or loss of rent payment
Theft or damage by tenants
This component of landlord insurance covers any damage to the contents of the rented property. It includes:
Falling of antennae or trees
Accidental breakage of glass
The insurance policy covers repair costs to building damage related to any of the following:
Smoke or Fire
Theft or robbery
Tsunami or Earthquake
3. What Does The Landlord Insurance Policy Not Cover?
Here are the events where a landlord’s insurance policy would not cover your property:
General wear and tear
Repairs by the property owner
Repairs by unqualified people on the landlord’s instruction on the rented property
Damage due to vermin, insects, and rodents
Damage or arrangements by a landlord with malicious intent, like hidden camera installation in the rental property, to keep a watch on tenants without their notice.
Damage caused due to pets.
Expenses incurred on regular maintenance.
Building design or construction issues
If the property owner violates the rental agreement and not the tenant
4. How To Compare Landlord Insurance?
Are you a landlord in search of a new landlord insurance policy? If yes, Here is a comparison of some of the best landlord insurance in Australia to help you find the right insurance for your needs.
The insurance policy covers the following causes:
Smoke or Fire
Theft or robbery
Tsunami or Earthquake
|Insurer Name||Loss of Rent||Tenant Rent Default and Damage||Accidental Damage||Cooling Off Duration||Cost-Effective Payment Mode|
|Budget Direct Landlord Insurance||10% of the sum insured||Elective||Not Offered||21 days||Yearly|
|Youi Building and Landlord Insurance||Up to 12 months rent||Elective||Not Offered||20 days||Yearly|
|Qantas Landlord Home and Contents Insurance||10% of the sum insured||Elective||
|Woolworths Landlord Building and Contents Insurance||10% of the sum insured or the lost rent or 12 month’s rent (whichever is LOWER)||Not Offered||Offered||14 days||Yearly|
|CommBank Landlord Building and Contents Insurance||52 weeks||Not Offered||Offered||21 Days||Monthly or Yearly|
|Over Fifty Landlord Building and Contents Insurance||12 months||Elective||Not Offered||14 Days||Monthly or Yearly|
In addition to free comparison tools, you can also use an online landlord insurance calculator in Australia to determine the exact value of your property and belongings.
5. How To Find The Best Landlord Insurance In Australia?
The right insurance depends on the individual circumstances and the level of required coverage.
Based on your needs, you can choose from a range of landlord insurance policies such as building cover, contents cover, and building and contents cover.
In addition to the basic plan, you can opt for optional covers like the rent default cover to enhance your coverage. Here we have listed top insurers that offer the different variants of landlord’s insurance:
This landlord Insurance offers comprehensive coverage for your investment property. It also offers an elective Complete Replacement and Tenant Protection Cover.
New policyholders get an additional benefit of up to $50 when they buy a policy online.
You can make claims for the following events if they cause damage or loss to your home and contents:
Damage due to an animal
Read the policy disclosure statement to get a complete idea of applicable restrictions and exclusions under the policy.
Do you want to know what landlord insurance is in NSW and where you can find the best landlord insurance?
NRMA Insurance (National Roads and Motorists Association Limited) has 90 years of experience protecting landlords for their diverse needs, including car, motorcycle, travel, business, and home insurance.
Besides NSW, the company also offers QLD, ACT, SA, WA, TAS, and NT services.
RACQ offers home insurance to residents of Northern NSW and Queensland. There are three different types of insurance:
Building Insurance: Covers only the building
Contents Insurance: Covers belongings on the property
Combined Contents and Home Insurance Plan: Cover the building and the contents within the leased property.
6. What Contents Does A Landlord Need To Cover?
Landlords are responsible for safeguarding the rented property against insurable events that can damage their investment.
Here is the list of contents that the insurance should cover against any loss or damage:
Fixtures and fittings
Electrical appliances such as air conditioning, heater, geyser, dishwasher, and stove
Blinds and curtains
Carpets and rugs
Detachable light fittings
In addition to regular repairs, maintenance, and safety installations, ensure the premises stay in good condition.
7. Landlord Insurance Vs Home Insurance
The main difference between home and landlord insurance is that the latter also covers legal claims for rental loss and additional legal costs. It is to execute a legal process to evict a tenant if they default on rent payments.
8. Is Landlord Insurance Cover Tax Deductible?
In some cases, it is, as building property contents insurance comes under investment management or maintenance. They can be tax-deductible.
You can also claim landlord insurance premiums for your tenanted property during your past occupation.
According to the Australian Taxation Office, the following expenses on a rented property are tax-deductible, and a property owner can claim:
Marketing for your apartment to find tenants
Property management fees
Real estate agent commissions
Pest control charges
Body corporate fees and Council rates
Unpaid Gas and Electricity bills by the tenant
Property Repair costs
Repayment of interest on investment home loan
Legal fees to take court action against a rent-defaulting tenant
Defend a damage claim by a third party for any injury at your rental property.
Expenses for gardening, cleaning, and lawn trimming
Travel expenses for inspection and collection of rent
You should consult a tax specialist to understand claimable expenses on your leased property.
9. How Is The Cost Of Landlord Insurance Computed?
There is no fixed premium for all landlord insurance plans. The insurance cost can be different for everyone as the policy premiums depend on a range of factors that are unique to each person.
Here are the various parameters that determine how much you need to pay for the insurance:
Additional inclusions such as elective covers like “rent default cover” can increase your policy premiums.
The excess you choose
Have you made any claims under your policy in the past?
Where is your tenanted property located? (You may be charged more if your property is susceptible to natural hazards such as floods, tornados, storms, bushfires, erosion, etc.
The crime rate of your suburb
Specific features of your leased property
The property type (premiums are more for houses than townhouses and units)
Your property’s value and the value of contents present within
The structural integrity of your rental property (buildings made from robust materials are safer and cheaper to insure)
How safe is your property? Suppose your property has bolted doors, fire alarms, and security cameras. In that case, it is less prone to theft and attracts lower premiums.
It is best to get a quote from three to four reputed insurers to compare prices.
10. What Is The Process To Claim Landlord Insurance?
Having decided to claim your policy, you need to first contact your insurance provider via phone or online. Provide your insurance policy number and mention your concern.
They will ask you to provide a few details about the claim. When filing a claim, submit the following documents to support your claim request.
Claim form downloaded from your insurer’s website
Copies of the rental agreement
Copies of messages or letters shared between you and your tenant, including notices
Maintenance or repair quotes
Before and after photos ready of your rental property
Property examination reports
In cases of a burglary that has caused substantial property damage, you must contact the emergency service or police.
Based on how sooner you contact the insurer and provide them with all the necessary documents, your claim can settle within a few days to a couple of weeks.
11. What Things To Consider When Selecting Landlord Insurance?
The right policy cover depends on your priorities as a property owner and the type of property you plan to lease.
Here we have discussed a few things when you plan to take out a new landlord insurance policy:
You need to understand how much excess you can afford throughout the policy term without experiencing any financial burden.
The key is determining what property features are worth protecting and whether you want to enhance your premium to cover their value. It will make it easier to strike a healthy balance between excess and premium.
Claims on landlord and home insurance aren’t uncommon in Australia. The potential pay-outs you receive under your landlord insurance policy can immensely offset the expenses and could save you from potentially disastrous circumstances.
However, a property investor should remember that each landlord’s policy differs. Therefore, they should understand their needs and compare policy features across different insurers to get the best protection.
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