What Does Landlord Insurance Cover? And What Isn’t Covered?

03 Jul What Does Landlord Insurance Cover? And What Isn’t Covered?

An investment property is a valuable asset that can provide property investors with favourable returns from rental income and capital gains. Safeguarding that investment is understandably a top priority and Landlord Insurance is one way to do that. With Landlord Insurance, property investors have a safety net for when something goes wrong at a rental property and peace of mind knowing they’re financially covered when issues arise. Read on to find out what Landlord Insurance does and doesn’t cover.

What Landlord Insurance covers

If you own a rental property, having the right insurance cover is an essential part of protecting your investment. Standard House Insurance is generally not enough to cover the additional risks that come with renting out a property. That’s where Landlord Insurance comes in.

Landlord Insurance is a specialised insurance cover for property owners who rent out residential properties. It’s designed to address the various risks and challenges landlords may encounter, offering financial security in the event of accidents or issues with tenants.

Landlord Insurance typically covers:

• Loss of rent: If a property is left uninhabitable or if a tenant defaults, Landlord Insurance covers loss of rent so landlords can continue to receive rental income even when the property is vacant or unable to be rented out.
• Contents owned by the landlord: Landlord Insurance may cover the cost of repairs or replacement of fixed chattels such as wall ovens, dishwashers and heat pumps. However, additional cover options or add-ons may be needed to ensure coverage extends to unfixed chattels such as washing machines and televisions if the landlord provides these.
• Intentional damage by tenants: Deliberate damage to rental properties or misconduct by tenants, including vandalism and theft, can be extensive and expensive. Landlord Insurance covers the cost of repairs, so landlords are not left carrying the financial burden.
• Legal liability: Landlord Insurance can protect landlords against claims for injury or property damage arising from incidents on the rental property, ensuring landlords are financially protected should a lawsuit or legal claim be brought against them by tenants or third parties.
• Methamphetamine contamination: Some Landlord Insurance policies cover expenses associated with identifying methamphetamine contamination and repairing physical damage to the property.

What Landlord Insurance doesn’t cover

When it comes to finding the right Landlord Insurance, it’s important to carefully check the policy’s specific cover limits and exclusions, as not all Landlord Insurance policies offer full cover. Additionally, Landlord Insurance policies generally won’t cover:

• Gradual damage: While Landlord Insurance may cover structural damage to the rental property, it doesn’t cover gradual damage, everyday wear and tear, mould and rot. These issues are considered maintenance-related and are the responsibility of the property owner.
• Tenant’s contents: Personal belongings of tenants living in the rental property are not covered by Landlord Insurance. Tenants are responsible for insuring their own things with Renters’ Insurance to cover against damage, theft or loss due to fire or natural disaster.

Understanding Landlord Insurance

Landlord insurance can be provided as an optional add-on to an existing House Insurance policy or offered as a stand-alone policy in the case of investment properties that operate under a body corporate that have Home Insurance cover taken out by the body corporate.

Work with a Max Insurances Adviser to better understand what is and isn’t covered by Landlord Insurance, and get help finding Landlord Insurance that meets your specific needs and provides adequate protection for your investment property.

For comprehensive Landlord Insurance solutions tailored to your investment property, contact a Max Insurances Adviser today.

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