Believe it or not, having the right Landlord Insurance in place can play a key factor in reducing a Landlord’s overheads in the long term. Lidia Siljanoski our Personal Insurance specialist explains how you too can achieve this.
While having minimal cover or reducing the scope of your Landlord Insurance is not something we recommend, we understand the importance of getting the best value for money when taking out Landlord Insurance. In saying this however, it is essential that your chosen insurance policy provides adequate coverage and financial compensation for any potential losses you experience.
A key way to derive the best value out of Landlord Insurance is by ensuring you only insure for the covers that you really need. Consulting an insurance broker is a stress free and easy way of achieving this. We can work with you to tailor a Landlord policy specific to your particular needs and the nature of your risk exposures.
Below we cover some handy Landlord Insurance advice that we recommend to our own clients. These tips could all end up saving you money when things don’t go to plan.
1. Accidental Damage or Defined Events?
We always encourage our clients to choose an Accidental Damage Landlord policy. A policy of this nature will cover you for accidental loss or damage caused by a tenant, for example if a tenant spills paint on your carpet. A Defined Events policy will only cover you for specific events listed in the policy wording such as fire, theft or natural disasters. If an Accidental Damage policy is not in place you could be left out of pocket if anything outside the selective reach of a Defined Events policy occurs.
2. Rent Default
Rent Default is another crucial feature of a Landlord Insurance policy. This cover will help to secure your rental income should your tenant default on their rent. It provides you with financial protection under the following circumstances:
- A tenant vacates the premises without notice
- A tenant defaults in paying rent owed under the terms of the lease
- A tenant is legally evicted, whilst a lease is in place
Without including this cover, you could stand to lose the steady revenue generated by your investment property for what could be an indefinite period of time.
3. Loss of Rent
Loss of Rent can cover you for lost rental income should your property become uninhabitable by tenants due to insured physical loss or damage to the building, e.g. significant water damage. This includes prevention of access due to damage of a nearby property whilst a lease is in place.
We always recommend this cover feature to clients. It will go a long way towards protecting the income stream from your property, even if it is uninhabitable by tenants until the rectification works have been completed.
Read more on Loss of Rent here
4. Landlords Insurance – Tax Deductible
One advantage of having an investment property is that your insurance is tax deductible. We recommend speaking to your accountant on how you can best take advantage of this tax benefit.
Following these simple tips above could see you save a significant amount of money in the management of your investment properties, while ensuring you still have appropriate insurance coverage in place should anything go wrong. A small, tax deductible expense now could save you thousands of dollars in lost rental income.
To find out more about Landlord Insurance, please click here to visit our website. To discuss your Landlord Insurance with one of our brokers, please contact our office on 1300 424 627.
The information contained in this documentation should only be considered as general advice. It is not intended to take the place of personal advice. Before acting on this information you should consider the appropriateness of this advice to your particular objectives, needs and financial situation. For a full explanation of policy terms, conditions and limits you should refer to the relevant Insurer’s Product Disclosure Statement which can be obtained from our office. Cover is subject to underwriting acceptance criteria.
Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.
