Several times we hear, “But why do I need landlord insurance when I have a property manager?”
Landlord Insurance protects you against unforeseen tenancy-related events that can cause a financial loss!
As soon as tenants are placed on your property, more risk is added into the mix.
WARNING: There are different types of landlord insurance cover, and some perform better than others. Be sure to speak with us about accessing quality landlord insurance accessible through our agency.
Here are SIX reasons why you need Landlord Insurance:
#1- Good Tenants’ Circumstances Can Change!
Yes, sometimes a tenant’s circumstances can change for the worse, and they could lose their job, and income with financial hardship, experience a relationship split and their ability to pay rent may suddenly change.
In these types of situations, as your property manager, we can only do our best to manage the situation and place the tenancy into the required legal process; however, we may not be able to avoid a financial loss.
A quality landlord insurance cover will protect you against tenant rent default should they not be able to pay.
#2- Unforeseen Delays with Tribunal Action
When it comes to a tenant getting behind in their rent, we must take legal action, and this can take considerable time, particularly if there’s a backlog of hearings should we need to take the matter to the Tribunal.
Depending on the lease type, a quality landlord insurance policy will protect you against delays where a bigger rent loss can occur.
#3- Intentional Malicious Tenant Damage and Theft Cover
It’s not just accidental damage you need cover for but also intentional, deliberate damage to the property and contents caused by the tenant (or their visitors) that you need protection against.
Further, you are also covered if the tenant removes your contents (carpets, curtains, light fittings, etc.) through theft.
Again, a quality landlord insurance policy protects you here, whereas your building policy does not give you cover.
#4- Damage caused by Drug Production
It’s regrettable that most drug production occurs inside a rental property where the production of drugs can occur between routine inspections.
Though we screen new tenants very carefully, legislation prevents us as agents from checking criminal records and convictions, and therefore there’s still a small risk a bad tenant ‘may get missed’.
In any case, should drugs get produced inside your rental property like methamphetamine, the costs are substantial to rectify, which include substantial meth decontamination cleaning and then the re-renovation of the property after the carpets, curtains and fittings have been stripped out.
We have seen costs to rectify exceeding $100,000, and building insurance WILL NOT INSURE against this type of loss or event, but a quality landlord insurance policy will.
#5- Death of a Tenant
Regretfully tenants can and do become deceased inside a rental property, and it may take some time for a body to be discovered. Should enough time elapse, then forensic cleaning will be required, and like drug production cleaning, the costs will be substantial to clean and likely remove and replace carpets, curtains and fittings.
Plus, you will also experience a loss of rent while all of this takes place, and again a quality landlord insurance policy will give you cover.
#6- Pet Damage
More and more tenants these days have pets, and therefore the risks of damage because of pets can occur. Because we cannot legally take a bond to cover pet damage, having a quality landlord insurance policy makes good sense!
Talk to us about the quality landlord protection cover we have access to through our agency with your property management.