Why have insurance?

Hand of a man fixing an insurance form

Landlord insurance is a type of insurance policy designed to protect property owners who rent out their property to tenants. It generally provides coverage against damages, losses and liabilities that may occur during the rental period.

In many strata schemes, investors have vested interests and own apartments, units or commercial space within a strata and need insurance against damages that are out of their control.

For landlords, protecting your investment against damage caused by tenants, which may be accidental, is a wise decision. Damage can lead to significant financial loss; however, the property owner can recover much of the cost of repairing or replacing the damages.

It can be challenging to predict the actions of tenants or the potential risks associated with renting out property. However, with the right insurance coverage, landlords can feel secure knowing that they are protected against a wide range of risks.

Another critical aspect of landlord insurance is liability coverage. This type of insurance covers the landlord against claims made by tenants or their guests for injuries or damages that occur in the rental property. For example, if a tenant slips and falls on a broken staircase, or cuts themselves on a broken window or door, the landlord can be held liable for the injury. Liability coverage can help the landlord pay for any medical expenses or damages awarded to the injured party.

Landlord insurance for mortgage approval

In Australia, obtaining landlord insurance is often a requirement for mortgage approval for investment properties.

When applying for a mortgage to purchase an investment property, most lenders will require the borrower to have landlord insurance in place. This can help to mitigate some of the risks associated with owning and renting out a property.

It can also provide a level of protection for both the lender and the borrower in the event that something goes wrong.

There are a number of different types of landlord insurance policies available, each with its own set of coverage options and benefits. Some policies may cover things like loss of rent due to tenant default, damage caused by tenants, or legal expenses related to tenancy disputes. Other policies may offer more comprehensive coverage, including protection against natural disasters, theft and other unforeseen events.

When applying for landlord insurance, it is important to carefully review the policy documentation to ensure that it meets the specific requirements of the lender. It is also important to shop around and compare different policies and providers to find the best coverage and value for money.

Man sitting on the couch with boxes around the living room

Keep your personal belongings insured

Contents insurance protects your possessions inside the property, including furniture, electronics and personal items of value.

Whether you are a landlord, tenant or owner-occupier, content insurance covers your contents against theft, damage, fire and other unforeseen circumstances as well as providing peace of mind. It helps individuals and businesses replace lost or damaged items without incurring a significant financial burden.

Landlord and contents insurance are a personal choice. Quality strata schemes will have an insurance policy covering the complex for external damage and public liability, and you should always check with the strata committee that the insurance is up to date and valid.

However, having specific insurance on your own property and contents is an additional layer of protection for your asset. Consulting a professional insurance broker is recommended before entering into any insurance contract.

It is our job at ASSM to assist in ensuring your strata scheme runs as smoothly as possible. When you are thinking of buying into a strata scheme or are looking to engage a professional and qualified team, contact ASSM and experience the difference that 40 years of successful strata management will make.

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