Do I really need Landlord Insurance?

29 Jan 2016
EAC
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Property investment carries inherent risks – especially if you depend on rental income to cover some of the costs of ownership. Landlords trust their property manager to find a reputable tenant. Unfortunately, no amount of tenant screening or security protocols can predict with full certainty what will happen during your property’s lease period.

That’s why many property managers recommend Aon Landlord Insurance. It covers many common issues such as loss of income, damage to property, rent default, contents and liability. And to make it even simpler, an authorised property manager can arrange it on the landlords behalf.

Below are scenarios all property investors should be prepared for and that property managers should warn their customers about:

Loss of rent

What would happen if your tenant suddenly lost their job or fell ill and defaulted on their rental payments? One insured real estate agent in Queensland recently had a situation where a tenant didn’t pay rent for two months and then vacated the property.

Landlord Insurance also covers general loss of rent, which may occur if a property is rendered unlivable. If your property caught fire and was gutted, the dwelling could be a total loss.

Rental income can disappear overnight, unfortunately your mortgage repayments will not.

Malicious damage

Malicious damage is a common problem for landlords. Let’s say you give notice to your tenant of your intention to move back into the property leaving them disgruntled. Following receiving notice, they break doors off the hinges, punch holes in a wall and damage the property in other ways with malicious intent.

Do you have the savings set aside to repair damage to your property?

Contents

Some claims events occur with little warning, are hard to prevent and can cause significant damage to your property’s contents. For example, when a dishwasher pipe bursts and causes flooding. Repairing damage to floating floorboards can cost thousands and leave your tenants without a functioning kitchen.

Property managers and landlords can do little to control such events. Insurance helps limit the impact of such incidents and protect your income.

Theft

The frequency of theft of contents not fixed to a wall would surprise most. What if your tenants loved the curtains in their rental property so much they decided to take them once their lease was up and they had vacated the premises?

You’ll need to replace these before your next tenants move in at a time where you may be already losing rental income between tenants.

Illegal drug lab operations

The discovery of drug and meth labs across Australia is on the rise. In Queensland alone, police uncover an average of one clandestine meth lab a day in suburban rental properties. If a meth lab was set up in your investment property it could result in an explosion, damage to your property and clean-up costs.

No matter how unlikely you think this could occur in your property – the risk continues to intensify in Australia.

Protect your investment property for less than a typical weeks rent.

As a landlord, your property is a long-term and significant investment that needs protecting. Think of Landlord Insurance as a safety net for when the unexpected happens, as many things could be out of your Property Manager’s control.

Aon landlord insurance provides cover for all these scenarios and more.

Aon is the approved insurance partner for EAC, and offer a suite of insurance offers as part of our member services. You can now protect your own business through their professional indemnity and office contents insurance, while also look to grow your revenue through their Landlord insurance distributor program.  Find out more here.

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