At the same time, standard home buildings and contents policies don’t usually cover malicious or intentional damage by tenants or the failure to pay rent. This is where ‘landlord insurance’ comes in handy. Landlord insurance is a policy that covers a property owner from financial losses connected with their rental property. It usually covers the following events:
- Malicious or intentional damage to the property by a tenant or their guests
- Theft by the tenant or their guests
- Loss of rent if the tenant defaults on their payments
- Liability, including for a claim against you by the tenant, and
- Legal expenses incurred in taking action against a tenant.
It’s important to remember that not all landlord protection policies are the same. Some, for instance, are designed to be taken out in addition to a typical home and contents or strata title policy, while others are more comprehensive. Meanwhile, other policies allow you to take out cover for the contents of the property, which is useful if you rent out a partially or fully furnished property.
If you are renting out a furnished apartment, you might need to check whether a landlord insurance policy will extend to covering damage to furniture, whitegoods and the like. If it doesn’t, it might be worth seeking out separate contents insurance to cover damage to the furniture you have made available to your tenants.
If you own a short-stay rental property, such as a holiday rental, which is professionally managed you can get a short-stay landlord policy which covers situations unique to holiday properties.
Finally, landlord insurance might be tax deductible, but be sure to check with your accountant before making a claim.
There are several companies that offer landlord insurance which you can research and compare at comparethemarket.com.au or Canstar. It might also be worthwhile speaking to the provider of your existing insurance policies such as your home or car insurance as they might offer a multi policy discount.