Believe it or not, having the right Landlord Insurance in place can play a key factor in reducing a Landlord’s overheads in the long term.
While having minimal cover or reducing the scope of a Landlord Insurance policy is not something we recommend, we understand the importance of getting the best value for money when taking out Landlord Insurance. In saying this however, it is essential that your client’s chosen insurance policy provides adequate coverage and financial compensation for any potential losses they experience.
A key way to derive the best value out of Landlord Insurance is by ensuring your clients only insure for the covers that they really need. Consulting an insurance broker is a stress free and easy way of achieving this. We can work with your clients to tailor a Landlord policy specific to the nature of their risk exposures.
Below we cover some handy Landlord Insurance advice and recommendations. These tips could all end up saving your clients money when things don’t go to plan.
1. Accidental damage or Defined events?
We always encourage property owners to choose an Accidental Damage Landlord policy. A policy of this nature will provide cover for accidental loss or damage caused by a tenant, for example if a tenant spills paint on the carpet. A Defined Events policy will only cover Landlords for specific events listed in the policy wording such as fire, theft or natural disasters. If an Accidental Damage policy is not in place, Landlords could be left out of pocket if anything outside the selective reach of a Defined Events policy occurs.
2. Rent default
Rent Default is another crucial feature of a Landlord Insurance policy. This cover will help to secure your clients’ rental income should their tenant default on rent. It provides them with financial protection under the following circumstances:
- A tenant vacates the premises without notice
- A tenant defaults in paying rent owed under the terms of the lease
- A tenant is legally evicted, whilst a lease is in place
Without including this cover, your clients could stand to lose the steady revenue generated by their investment property for what can be an indefinite period of time.
3. Loss of Rent
Loss of Rent can cover your clients for lost rental income should their property become uninhabitable by tenants due to an insured physical loss, or damage to the building, e.g. significant water damage. This includes prevention of access due to damage of a nearby property whilst a lease is in place.
We always recommend this cover feature to clients. It will go a long way towards protecting the income stream from their property, even if it is uninhabitable by tenants until the rectification works have been completed.
4. Landlord Insurance – Tax deductible
One advantage of having an investment property is that the Landlord Insurance can be tax deductible. We recommend clients speak to their accountant on how they can best take advantage of this tax benefit.
Following these simple tips above could see your clients save a significant amount of money in the management of their investment properties, while ensuring they still have appropriate insurance coverage in place should anything go wrong. A small, tax deductible expense could easily save them thousands of dollars in lost rental income.
To find out more about Landlord Insurance, please click here to visit the page on our website. To discuss your client’s Landlord Insurance with one of our brokers, please contact our office on 1300 668 033.