| Obtaining suitable landlord insurance is one aspect | | | | This includes holes in walls, smashed doors & |
| of property investing that you can't afford to | | | | intentional damage to floor coverings as well as |
| overlook. Malicious damage by a tenant, loss of | | | | unintentional damage cause by honest tenants. |
| rental income & legal liabilities are just some | | | | 2. Rent Default & Theft - When a tenant |
| of the hazards you will face as a property | | | | owes you back rent, skips town & steals |
| investor and are reasons why many investors | | | | some items a properly structured landlord |
| hand the responsibility for running their investment | | | | protection insurance policy will cover these events. |
| over to a property manager. | | | | However, there will be a maximum amount that |
| However, obtaining sufficient landlord protection | | | | can be paid out by the policy, normally a certain |
| insurance is one responsibility that you should take | | | | period of weeks rent. |
| care of yourself - even if you do end up going | | | | 3. Loss of rental income - This will cover you in |
| with a policy recommended by your property | | | | instances where malicious damage/accidental |
| manager (more on this a little later). | | | | damage to your property has resulted in a loss of |
| When assessing the fine print of an insurance | | | | rental income whilst repairs are carried out. Loss |
| policy, ensure it does not contain any clauses that | | | | of rental income can also occur from other |
| will negatively impact you from being covered for | | | | events such as absconding tenants, the tenant |
| all the common tenancy problems. Often property | | | | defaulting on payments, death of a sole tenant |
| investors take out a building policy that has been | | | | etc. |
| loosely marketed as a landlord product and | | | | 4. Legal liability - Be sure that your insurance |
| assume that they have adequate cover. | | | | policy covers you for public liability. This will |
| The fine print in these policies frequently reveals | | | | protect you for any event whereby a tenant (or |
| clauses excluding events such as malicious | | | | any of their visitors) suffers an injury and |
| damage by a tenant, accidental damage by a | | | | subsequently sues you for damages. Competent |
| tenant, legal liability & cover for the loss of | | | | property managers [ a good starting point in |
| rental income - all essential components that you | | | | sourcing suitable insurance as it is in their best |
| require coverage for. | | | | interests for their clients to be adequately |
| Landlord insurance requires special inclusions and is | | | | covered. The reason for this is that the property |
| only offered by a limited number of insurers. | | | | manager is at risk of losing income if their |
| Before signing up for an insurance policy ensure | | | | uninsured client ends up losing their assets in the |
| that it covers the following risk factors: | | | | event of a tenant making a claim against a them. |
| | | | Ensure you compare as many policies and |
| 1. Malicious Damage/Accidental Damage - This | | | | insurance premiums as you can before making a |
| covers damage caused by a tenant, which does | | | | decision on the best landlord insurance policy for |
| not occur as a result of normal wear & tear. | | | | your particular circumstances. |