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Landlord Insurance - Commonly Asked Questions

Landlord insurance aims to protect landlords from tenancy related risks to their investment property

Following a recent webinar Q&A session with Carolyn Parella, Executive Manager of Terri Scheer, we have compiled a list of commonly asked questions regarding landlord insurance.

How much does landlord insurance cost?

The cost for a general landlord insurance policy will vary from state to state, but an estimate is that it would cost the same amount as a week's rent.  The cost is also tax deductible.

What are some important points to consider when comparing different kinds of landlord insurance?

When comparing different kinds of landlord insurance, it is important to know what kind of cover you need, and the differences between levels of cover.

How many weeks of rent the policy covers for, levels of cover, waiting periods, excesses, terms and conditions and exclusions associated with each kind of insurance are all important factors.

How does a landlord insurance claim effect a landlord in regards to future premiums and credit ratings?

The difference between landlord insurance and other kinds of insurance is that generally the person who is insured (the landlord) doesn’t have any impact on the loss.

Providing they’ve maintained the property well and haven’t contributed to the loss, claims should not have an impact on their ability to purchase insurance or affect their credit rating.

What happens if a tenant denies damage to the property? How is this claimable in regards to bond and insurance?

An assessor would come and have a look at the property, and this is where there is so much value in an ongoing inspection report. Regardless of whether the property is managed by a property manager or whether you manage it yourself, it is so important to have a thorough ongoing inspection report.

If you have taken photos of the condition of the property, it would be difficult for the tenant to deny damage to the property if you have the proof of the condition or the property when they moved in.

What are the criteria for a change in premium?

This depends on the loss ratio.

The principle of any kind of insurance is that the premiums of the many pay the claims of the few.

If a landlord has made many claims it is a trigger that it’s a higher risk and so there would be a premium increase.

What is the difference between malicious damage and deliberate damage?

The simple way to define it is malicious damage is something which is done with spite.

Intentionally kicking a hole in the wall for example is something which is malicious, it was done with spite.

Deliberate damage however is something that you are doing with intent, but not doing with spite.

Something such as hanging picture hooks on a wall that you haven’t asked permission for. Done with the intention to make the property more ‘homey’, but has changed the property without permission to do so. The difference is the intent with which the damage was caused.

Are light fittings, carpets, blinds and curtains all covered by landlord insurance?

Yes, they are all considered contents, so they are insured under landlord insurance.

Does having locks on all doors and windows reduce the insurance premium?

Yes, having locks on all doors and windows can help reduce the premium.

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Real Estate Investar Editor
Real Estate Investar Editor
Real Estate Investar provides intelligent software, tools and data to help you save time and make money in the residential property investment market.

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