Insuring a property that you own but rent out to tenants is quite different to insuring a property that you own and live in yourself. You are trusting people that you hardly know (and will quite possibly have never meet) to look after your investment the same way you would. It is somewhat of a gamble, however taking out comprehensive landlord’s home insurance will give you the peace of mind that your property is covered should something happen to it.
Landlord’s home insurance doesn’t usually cover the contents of the home, but does cover the physical structure itself. Depending on the policy, this can also cover fences, gates, sheds and car ports.
Fire, Flood and Theft
There is a myriad of reasons as to why a rental property can be damaged. Fire, theft and flood are mostly out of your control, but will still dramatically affect your investment. The damage caused by any of these threats could be widespread and your insurance policy could save you thousands of dollars in repairs and labour.
Tenants
Your tenants are also a risk in their own right. Because it’s not their house, they are not always going to look after your property as well as you would want them to. Security deposits are a good way of protecting your investment, but in some cases, the bond doesn’t always cover the cost of the damage a tenant can leave behind. This is where your home insurance will pay for repairs so that you can re-lease the house quickly so as not to lose income on the investment.
Liability
Liability should also be included in your home insurance policy. This is an important element, because it will cover you if anyone is injured on your property. Therefore, you will not have to pay for any legal fees, medical costs or salary to the person who has been hurt. Just be sure to check the conditions of the liability element of the home insurance because if you were negligent and an accident occurred because of it, you may not be covered.
Landlord’s home insurance goes hand in hand with renting out a property to tenants. If you have a reputable property management firm who screens tenants and conducts regular inspections of the property, along with comprehensive home insurance, you can rest assured that you won’t be lumped with expensive repairs or nasty surprises when tenants move out. It really is a small price to pay for peace of mind.