Whilst having the best Property Manager is one step closer to ensuring your investment is well cared for it is strongly recommended that you take out an appropriate landlord insurance cover to manage other risks associated with owning an investment property that cannot always be foreseen.
In addition to building insurance, Landlord insurance can cover financial loss incurred from a variety of issues which includes, but is not limited to: -
- water damage either by flood or burst pipe
- the sudden death of a tenant;
- tenants who can’t pay rent due to financial hardship or abscond from the property;
- tenants who abscond from the property.
Most importantly, you want a suitable Public Liability cover that would protect you from any accidents or injury that may occur within your investment property.
Remember, under current tax laws, the cost of landlord insurance is tax deductible and can start at around $5 per week.
If you have an investment apartment, don’t assume that the Owners Corporation insurance provides coverage for everything. While common areas like lifts, gardens, foyers, building wiring and so on will typically be covered, it is always important to check the policy the body corporate has purchased.
Some risks, such as liability within your unit and damage to floor coverings from a leak for example, may not be covered.
Insurance policies can be quite complex and unintended gaps can occur in your coverage if the policy isn’t thorough enough. That’s why it’s wise to receive professional advice and undertake the necessary research prior to entering into new arrangements.
And if you think this won’t happen to you – think again! In the last 12 months alone, MMJ has processed two significant insurance claims, one being a fire that started due to a faulty washing machine and another where the property flooded due to a burst pipe in the bathroom when the tenants weren’t home.
Both landlords were fortunate enough to have landlords insurance cover and were able to recover all out of pocket expenses including loss of rent from their respect insurers.
For more information regarding Landlord Insurance feel free to contact your Property Manager who would be more than happy to provide you several options for consideration.