One piece of smart advice when it comes to Investing in property is that when you own an investment property, it is worth paying an extra couple of hundred dollars a year to insure it. Being caught without it could turn a profitable investment into a costly venture! There a variety of insurance providers you can go through and a variety of insurances that you may want to consider taking out to protect your asset.
Cover can range from negligent events as well as accidental events and natural disasters.
The most common type of insurance taken out by landlords is Landlord Insurance. Landlord Insurance generally protects your investment property and any contents you provide for your tenants from damage or loss of rent. The coverage may include:
• Building Modification
• Escaping Water
• Intentional Damage
• Legal Liability
• Emergency Repairs
• Clean Up and Professional Fees
• Temporary Accommodation
• Funeral Expenses
• Loss of Rent
• Broken Glass and Ceramics
• Loss of Landlords Furnishings
It is important that you read your policy and understand what you are and are not covered for. Avoid the very costly mistake of under-insurance. Remember that prevention is better than cure.
There are some mandatory items that must be in your policy for peace of mind:
- Always insure your investment property to replacement value. This is the cost necessary to to repair or replace your entire home.
- Make sure the building itself is insured – some Landlord Insurance policies will include this as part of a package, others won’t. Building insurance covers you for unexpected events that damage your investment property such as fire, storm, flood etc.
- In light of recent storms, floods and natural disasters – check that your policy covers you for natural disasters.
- Public Liability – most insurers providing Landlord Insurance will provide cover for public liability to a certain value. What they generally don’t cover is public liability for ‘uninvited guests’. For example an intruder or burglar who whilst in the process of theft, trips and injures themselves and then sues the landlord. Check with your insurer that public liability for ‘uninvited guests’ is covered, and if not, get them to add it in.