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16 Mar 20

The importance of Landlord Insurance

A Landlord faces a number of risks associated with their rental property but surprisingly it is common for Landlords to not be adequately insured for such. Risks including tenant damage and rent default, theft, and even fire, storm or flooding, may not be covered under a standard building insurance policy.

A common question our team is asked is “What is the difference between landlord insurance and building insurance?”.

To try and answer this in short, building insurance is the most common policy for landlords and most standard policies cover for losses to the building resulting from unexpected events. Landlord insurance provides protection specifically for tenant related risks that are not incorporated into standard building insurance policies. Apart from rent default, this also includes accidental damage, pet damage or even damage caused by a third party (eg the tenants visitors).

A common issue that arises with investment properties with long term tenancies is that no issues would arise therefore the Landlord believing there to be no need for landlord insurance. However, it is important to remember there are a number of factors that can change in anyone’s life on a regular basis. Whether it be a job loss, redundancy, injury, break down of a relationship/marriage or personal hardship, all of these factors can influence the rental income and condition of the property, leaving the landlord exposed to high financial risk if things go wrong.. 

Additional risks can be associated with legal liability to tenants and their visitors and potential claims arising from injuries caused to people in or on the premises. 

It is highly important for landlords to read the landlord insurance policy prior to taking out cover as unfortunately, not all policies are the same. Most policies cover malicious damage but many won’t cover accidental damage. Many also exclude pet damage, damage to contents (eg carpets and window furnishings) and some even include rent default as an optional extra). 

If you are unsure about your policy, contact our Property Management team to discuss the suitability of your policy based on our experience or seek advice on who we recommend.

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