Landlords Insurance = Peace of Mind

No arguing: You need Landlords Insurance if you invest in rental property.

Some might think that it's an expensive luxury, but many more experienced investors understand the true value of it. When the nightmare tenants from hell go bad, you're going to need it.

A survey of 300 landlords conducted recently by Woolcott Research showed that two out of five landlords had experienced tenant damage to property, and/or defaults on rent. Frighteningly, less than half of the landlords surveyed have landlord-specific insurance.

Landlords insurance or Landlord Protection Insurance covers specific risks involved with renting out a property. These are risks not normally covered by a typical home and contents or strata title insurance policy:

What a typical landlord insurance policy should include:

  • Cover for intentional or malicious damage to your property by the tenant or their guests
  • Loss of rent if the tenant defaults on their payments
  • Legal expenses you might incur if you need to take action against a tenant
  • Theft by the tenant or their guests
  • Liability, including a claim against you by the tenant (many real estate agents and lending banks insist on public liability insurance, but if they haven't this is very important!)

Not all landlord protection policies are made equal.

It pays to shop around for your policy (as with any insurance policy). Some are designed to be comprehensive, while others are meant to be taken out as an addition to a typical home/contents or strata policy. Others cover you for furniture, which is very important if you are renting a property out furnished.

It's important to remember that you're likely to have fewer problems with tenants if you rent your investment property through a real estate agent. About a third of self-managing landlords don't screen their tenants, check their employment and rental histories, or make regular inspections. Many don't even check rental or employment histories.

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