5 Reasons Why You Need Landlord Insurance
As a landlord, your investment properties are likely some of the most valuable assets you hold. And no matter what your long-term goals are with property investing, it’s important that you protect your assets and minimise the risk of significant financial loss if something happens to your property. While it’s a cost to add to your monthly or annual expenses, it could pay back tenfold in the case that you ever need to make a claim (hopefully, you don’t!). Here are five reasons why you need landlord insurance.
To protect you if your tenant’s circumstances change
Thorough due diligence during the application process is normal, and it helps you pick the best tenant. However, it doesn’t guarantee the tenant will keep your place in top condition. If a tenant’s circumstances change, it can affect their financial stability and impact how they look after your place. Landlord insurance will protect you from any losses you may incur if your property becomes unexpectedly vacant and cover the expense of any repairs that may be needed.
If you have a short-term or holiday rental
When you have a short-term or holiday rental, there’s often not as much due diligence on potential tenants and guests. This makes landlord insurance particularly important as you don’t want to risk spending more than the price of someone’s stay for repairing any damage they cause.
Peace of mind in case of accidents and natural disasters
Accidents happen, as do natural disasters. Having adequate landlord insurance will cover you in the event of floods, bushfires, or other natural disasters (depending on your policy). It will also cover you for broken or leaking water pipes or a house fire.
To cover the cost of damage caused by pets
Pets are becoming more common in rental properties. While they’re often cute, cuddly, and great company for your tenants, they can cause damage, especially to floors and gardens. For example, a dog may cause a stain on the carpet in a bedroom that can’t be removed after steam cleaning. Landlord insurance would help cover the costs to replace the carpet in this room.
If your tenant has to move out of your property unexpectedly, landlord insurance may cover some of the costs you incur. These costs may include cleaning, repairs, and advertising fees.
Landlord insurance is a good safeguard for your investment property and your finances. By taking out a policy that meets your needs, you’ll have peace of mind that your assets are protected, and you’ll have the means to resolve any problems now and in the future. Of course, your level of cover will depend on the policy you take out, so make sure you do your research and choose a policy that meets your budget and provides the level of protection you need.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.