What is Landlord Insurance?
Landlord insurance is a package of insurance cover that is specially designed to protect owners of tenanted properties. The package can be tailored by choosing the sections needed and the amount of cover.
There are two main types of insurance for the contents, fixtures and fittings:
- Accident Damage – which provides wide cover for accidental loss or damage to all contents of the property belonging to you, such as carpets, fixtures and even the interior paint. There are exclusions, such as intention damage or maintenance issues. Common property and the building structure are usually not covered for multi-tenanted properties. These risks are covered by a separate strata cover.
- Defined Events – this type of cover is more limited, and the premium is generally lower. It covers only events that are listed in the policy wording, such as fire, lightning, impact or malicious damage. Again, there are exclusions, such as intention damage or maintenance issues. Again, common property and the building structure are usually not covered for multi-tenanted properties. These risks are covered by a separate strata cover.
What are the types of covers Landlord Insurance offer?
- Property Damage: As noted, there is the choice of defined events or accident damage covering the interior contents, fixtures and fittings.
- Public Liability: If a tenant or a visitor gets injured on the property due to the landlord's negligence, this coverage can protect the landlord from potential legal claims and medical bills.
- Loss of Rental Income: If the property becomes uninhabitable due to fire or storm damage, this cover section pays the landlord for loss of rental income during the repair period and up to a new tenant is found.
- Optional Add-ons: Often insurers have optional cover available at an additional cost. These include Theft, malicious damage or Rent Default by tenants.
What factors influence Landlord premiums?
The main facts are:
- Property Location: Properties in areas prone to flooding will have higher premiums or Flood insurance excluded.
- Property Type and Age: Older properties, wooden or those with heritage structures will have premium loadings applied.
- Coverage Limits and Excess: Higher coverage sums insured directly increase the premium. Taking a higher excess can however lower the premium.
- Prior Claims: if you have had prior claims, this will also have an impact on your premiums.
Why are Sums Insured important?
Having the right amount of cover and the correct sums insured is essential. It’s recommended that you review the type of cover and the sums insured if you renovate and make other changes to the property, as well as taking into account inflation.