Is your landlord insurance up to date?

landlord insurance

Having good landlord insurance is a vital part of owning a rental property. Just as important is an annual check to make sure your cover is still providing the best options to protect your investment.

The experts at One Agency Orange have compiled this quick annual health-check to help protect your assets and guarantee your property is covered.

Adequate cover

‘The first thing you need to check is if you have enough cover,’said Simone Fogarty, Director and Senior Property Manager at One Agency Orange.

‘Properties increase in value, you may have added value since you took out your policy, or maybe even bought it in a rush so your annual policy health check is the right time to review the value of your property and the cover you already have.’

Next, you want to check that the details of your policy are right for your specific circumstances. There’s no one-size landlord insurance policy that’s right for every piece of real estate, it should fit your property and the areas you want to ensure are properly covered in the event you need to make a claim.

What will a claim cost?

If you haven’t made a claim on your policy, you may not be aware of the cost of making one. Some policies require the equivalent of the bond as excess on a claim while others require a flat rate. Check the requirements of your policy for how much you’ll have to outlay for a claim and what variations and allowances are in place.  

Secure the property

Do all the locks work? Landlords have a duty of care to make sure all the door and window locks are working and will keep the property secure. If there’s a break-in while a tenant holds a lease and the locks are found to be faulty or ineffective, the tenants’ contents insurance may be void and you, as a landlord, may be required to pay for their loss.

As well as the tenant’s loss, your insurer may not cover any damage to the property caused by a break-in if it didn’t have adequate security in place.

Fire safety

Just like keeping the locks working, a landlord is also required to ensure all fire safety devices such as smoke alarms are working on the property prior to and during a tenancy. Failing to have the correct fire safety installed and in working order could leave your investment uninsured if a fire occurs, causing you significant out-of-pocket costs for the clean-up and repairs.

If you’re unsure of the requirements or how to check the fire safety devices, you can hire a third-party company to complete the annual fire safety checks on your behalf.

Rent Arrears cover

Landlord insurance policies often require a fixed-term lease agreement to be in place in the Rent Arrears part of your cover. If you have a periodic lease in place, check with your insurer if your policy can cover this or discuss options with your property manager.

‘Read the fine print – for this section and in the whole policy,’ advises Simone.

‘Make sure the policy you have covers all eventualities, as the type of lease is just one of them. Not all policies provide broad cover so it pays to shop around and compare your policy with what other insurers can offer.’

It’s also a smart move to check the claim limits on your policy and the circumstances your provider will pay a claim for rent arrears. For example, some insurers will pay for a year of rent arrears, others far less; one will pay legal expenses for taking a tenant to court, another may not.

Accidental damage

The tenants and their guests are responsible for any damage they may cause to the property, but accidents need to be covered in your landlord insurance. Make sure your policy includes an adequate Public Liability section to cover the tenant and any of their guests for any injuries that may be sustained due to an accident at the property. This is especially important if an accident is caused because the property has not been maintained to a sound and secure standard by the landlord.

Do your homework

It’s common to take out a policy at the same time the property is bought, which is usually a time when you’re busy with other details. Your annual check-up is also a perfect time to do a little research on your insurance provider and see what people are saying about their service so you know whether you’ve signed up with the right insurer.

‘As well as these key points, one of the main things to look for is how long they take to pay a claim and if that process is easy,’ says Simone.

‘If your insurer isn’t coming up five stars in those areas, you may like to find one who is. It takes enough time and energy to deal with an accident or damage. Should that occur, you don’t want the additional stress of having to do battle with a difficult insurer.’

Need to know more?

‘An experienced property manager can help you navigate the terms of your policy and advise you on the best terms so make use of their expertise,’says Simone.

‘If you’re looking for a new policy, our preferred insurer is RealtyProtect Landlord Insurance. They’ve worked closely with property managers to create excellent policies and are backed by Australasia’s largest general insurance brokers so we’re confident you’ll get a policy that will suit you.’

Our service is all about making your real estate experience as stress-free as possible. Call us or come and meet the team in person at our office in Summer Street. We’re Orange’s friendliest and most energetic agency.

02 6362 9560 | | Suite 7/230 Summer Street Orange NSW 2800