As a landlord you may feel overwhelmed by the responsibilities and costs this position comes with. You may even find yourself asking whether it is all necessary and if there is something that can be cut to ease the financial strain.
The recent weather events has highlighted the importance and necessity of having insurance on your property as numerous owners have been protected against huge monetary loss.
What are the benefits of insurance?
- Provides protection: having cover reduces the impact of loss as it provides financial reimbursement during a crisis. Not only are you protected financially, but also helps reduce the mental stress that arises during tough times.
- Provides certainty: for a relatively small contribution you have assurance that in the event of an incident you will enjoy cover. It is also easier to pay a monthly or small annual amount versus having to spend a large lump sum in the event of an incident.
- Provides assurance: you know you have a safeguard against unforeseen events and consequential loss.
However, there are some important points to consider when speaking to your insurer –
- Familiarise yourself with the rules and provisos for making claims and if there are any exclusions. Certain insurers need the landlord to prove that thorough tenant checks have been done.
- Ensure that the cover is for a rental.
- Ensure you have sufficient cover.
- Ask about loss of rental cover. The recent floods and Cyclone rendered some properties temporarily uninhabitable, and in a few instances, tenants were given rent relief. Those owners with the appropriate cover were able to use their insurance to mitigate this loss. Loss of rental cover can also provide you with rental income in the event of there being excessive damages to your property by a tenant, and the time for the necessary repairs and maintenance required means a lengthy period without rental income.
As a landlord it is advantageous to have insurance on your rental property. We must provide insurance information on any tenancy agreement, including whether the property is insured or not, as well as the excess amount of any relevant policies.
On a side note, the new legislation says that if a tenant or their guests cause careless damage in a rental property, they will be liable for the cost of the damage up to four weeks’ rent or the landlord’s insurance excess, whichever is lower.
Your property is your most valuable asset, and if you are like most people, you probably have a mortgage for this asset. Having a mortgage worth hundreds of thousands of dollars comes with several risks. What happens if you become ill or sustain an injury and are no longer able to work? Or if you pass away before the mortgage has been repaid? This could leave your family with the burden of covering the mortgage payments and potentially lose the roof over their heads. Thankfully, there is mortgage protection and mortgage life insurance which will cover your financial obligations for involuntary unemployment, critical or terminal illness and death.
We would encourage you at this point to review your existing insurance to ensure that you enjoy sufficient cover for any potential claim that may arise.
We recommend engaging a broker for your insurance needs to ensure you are getting the most value filled and appropriate cover for your property. We can make introductions to a great team that may be able to assist you with all your insurance needs – reach out to our team for the contact details.
General Manager – Chantel de Vos Ph: 021 341 089
Warm regards,
The Benchmark Property Management team