If you’ve just bought an investment property or you’ve up-sized and have decided to keep your old property, you might be figuring out how much you can make from renting it out. Landlord insurance is an extra cost that many people often overlook when starting out with real estate investing. However, there are many reasons that make this extra cost worthwhile.
Protection from loss of rent
A type of landlord insurance is rent insurance. This will cover loss of rent in the case that a tenant moves out without notice or has breached their lease. However, you won’t be covered if you’re having trouble finding a tenant as a result of general market conditions.
Depending on your policy, you might also be covered for loss of rent if your property is suffering damage where it can’t be tenanted. You have to be careful when comparing different policies since some will be more comprehensive than others.
Protection from damages
Landlord insurance should also cover you from damages made by the tenant, not including damages that have come from general wear and tear. Typically, these damages must have some malicious intent.
Protection from theft
If your tenant has stolen any items when they leave, you can claim the cost of replacing the item. Make sure to check the fine print for details on how much can be claimed. You also need to look out for the excesses that need to be paid if you were to make a claim to determine how worthwhile a particular policy is.
Protection from legal action and public liability
In the off chance that you have issues with a tenant, there could be a range of legal costs involved with resolving problem. Landlord insurance can assist with costs involved for things such as attending a tribunal hearing or retaining legal counsel.
On a similar note, landlord insurance should also be able to protect you if a claim is made against you. For instance, if a tenant sues you for injury, you should be covered for public liability.
Protection for home and contents
A comprehensive landlord insurance policy should cover your property in the case of natural disasters. For instance, storm damage, fire damage, flood damage, cyclone damage and civil unrest.
You should also be covered for accidental damage to your home and contents. Most of the time, you’ll be covered for any items that can’t be removed easily such as plumbing systems, appliances, fixtures and fittings.
Whether you’re about to start a tenancy, you’re in the middle of one or you’re ending one, it’s important to know the relevant information on renting for your specific location. Landlord insurance is slightly different across the globe, hence, make sure to do your research of what kinds of policies are available for you.