picking the right insurance
company for you

Landlord insurance is something that all savvy property investors should have. It gives you peace of mind knowing you’re covered for a variety of problems. Before committing to a policy, however, you should carefully compare a variety of different policies to make sure you know exactly what you’re covered for.

We’ve put together some tips and what to look out for when comparing different policies to find what’s right for you.

landlord insurance is different to
home and contents insurance

Home and contents insurance normally provides cover for loss or damage to your property as a result of unexpected events such as fire, storm and flood, however, when renting your property there is also the risk of accidental or malicious damage caused by the tenant. It is worth considering whether your home and contents insurance covers you for these risks.

Landlord insurance provides protection for some of the tenant related risks that may not be covered by standard home and contents insurance policies. Usually a main difference with landlord insurance is the breadth of rental income protection and whether loss of rent is included as standard or is an optional extra.

it’s not one-size-fits-all

The amount of cover and limits offered varies from insurer to insurer. Landlord insurance often offers cover for four areas: tenant damage and loss of rent, contents insurance, building cover and legal liability. Depending on your property and requirements, you may need a policy that covers all four, or just one.

the bond doesn’t always cover
your losses

A lot of property investors think that the bond will cover the losses; after all, isn’t that what it’s there for? Sadly, in most cases, the bond simply isn’t enough. If the rent is 4 weeks or more in arrears when the tenants vacate, that’s the full bond already used without leaving any money for cleaning or minor repairs if needed. Without landlord insurance, this can leave you out of pocket once the bond has been exhausted.

find out the excess

When you make a claim, you may be required to pay a small amount of the cost, which is called an excess. When it comes to malicious damage, many insurers consider each piece of damage as a separate event, meaning they attract their own excess. If your property had multiple pieces of damage and it can’t be proven that they all happened at the same time, the excess can work out to be very expensive!

Not every policy has the same level of excess so it’s important to find out how much the excess is before committing to a policy.

pet damage

Most of the time, humans can create far more damage than pets, however, it’s still worth checking whether pet damage is covered.

drug labs

Insurance cover for the cost of meth contamination clean-up depends on the individual insurer and the policies they offer. It’s worth asking the question to find out whether you’ll be covered in this situation.

periodic tenancies

Many policies require a fixed term lease to be in place at the time of a loss; periodic agreements are still legal agreements, just without an end date. Before committing to a policy, it’s best to check what their conditions are surrounding periodic tenancies and consider this before accepting a periodic tenancy in your property.

check the level of cover and service against what you’re paying

While the cost of landlord insurance isn’t as expensive as you’d think, costs can vary between different insurers. One of the most important things you should be checking is that you are getting adequate coverage for your situation at a fair price.

how and when you can make a claim

If you need to make a claim, you want it to be as quick and easy as possible. It’s worth finding out in advance when you can make a claim and how to make one; for example, find out whether claims can be made 24 hours a day, what you need to provide and what happens in worst-case scenarios (e.g. if receipts are destroyed in a fire).

be wary of policies offered by
standard insurers or banks

They may offer you a great deal on the premium but you may find that the cover falls short when it comes time to make a claim.

check that the bond can be used for cleaning/repairs

Most insurers will allocate the bond as the first four weeks’ lost rent. This means if you make a claim for loss of rent after a tenant has vacated your property, the insurer will pay you from the fifth week because you should have received the first four weeks back from the bond, however, any cleaning or repairs that may need to be done to bring the property back to a satisfactory state are not taken into account. You will have to pay for this.

Look for a policy that will let you use the bond for cleaning, rubbish removal and minor repairs, and will pay you the full amount of rent owed from day one. Street Ninety Nine - Picking The Right Insurance Company