The benefits of landlord insurance in unpredictable situations

Being a landlord can be unpredictable; while you can, to a degree, control the way that renters treat your property via a tenancy agreement, there are unforeseen circumstances that can arise which may end up costing you a considerable amount of money. As such, landlord insurance is an important option to consider as it will help you to better protect your assets and income. To provide some more information around landlord insurance and the options available, I’ve decided to share the following piece by EBM Insurance Brokers, which appeared in the March edition of CENTURY 21 Wentworth’s Property Investor.

 

Insurance is essential when bad things happen to good tenants


Even the best tenants can't fully protect a landlord's assets and income - as many landlords can tell you.

 

For instance, take a look at landlord insurance claims lodged last year; they tell the story of what can go wrong - from driving lessons to car fires and burglaries.

 

"My tenant was teaching his wife to drive," said one claimant.

 

"As she pulled into the driveway, she hit the mailbox and, amidst the panic, hit the accelerator. They went through the front doors of our rental property."

 

The tenants couldn't live in the property while repairs were being carried out. Luckily, the landlord had an EBM RentCover Platinum policy, which paid out more than $14,000 for the cost of home repairs and rent lost while the property was being fixed.

 

Other cases have involved a burglary:  "Burglars smashed up the place. They ruined their (the tenants') stuff as well as our carpets, curtains and blinds," said another unlucky claimant.

 

"They had to stay with a relative while the place was made liveable again."

 

A RentCover Ultra policy covered the damage and loss of rent.

 

A third case involved a fire. In this instance, the claimant's tenants woke up one night to find their apartment full of smoke, but there wasn't a visible fire. It turned out that a car in their basement car park was on fire and the smoke was filling their apartment.  Extensive cleaning was needed to make the apartment liveable again.

 

Thanks to a RentCover Ultra policy, the clean-up, replacement of damaged items and loss of rent did not come out of the owner's pocket.

 

RentCover General Manager, Sharon Fox-Slater, said that landlords could potentially lose the lot if they were sued following a death or serious injury.

 

"A professional property manager is vital to reducing the risks posed by tenants, but 'stuff' can still happen," she cautioned.

 

"An asset worth hundreds of thousands of dollars should be professionally managed and fully protected with insurance, but research shows that one in five landlords who use professional property managers still don't have landlord insurance."

 

"Even the best of tenants can suffer circumstances beyond their landlord's control or, for that matter, beyond their own control. Many different everyday situations can lead to occasions where rental properties are damaged and untenable," concluded Ms Fox-Slater.

 

As with any type of insurance, landlord policies need to be reviewed periodically to ensure that the sums insured are up-to-date as rents, repair costs and property values change.

 

For more information about the range of options and services offered by EBM Insurance Brokers, feel free to visit http://www.ebminsurance.com.au/.

Posted by Charles Tarbey on 22/04/2013 at 12:00 AM | Categories:

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