So you finally decided to invest in a rental property, you start with a four-door apartment or perhaps, a duplex to help augment your income—or perhaps, to start building a nest egg for an impending retirement. Whatever your reason may be, this huge investment entails not just a safety net for the property itself but for you, as a landlord, as well. You will need landlord protection insurance to cover not just your property but other aspects of the tenancy like wrongful entry or eviction, rent default or malicious damage.
While most insurance companies deliver policies with adequate landlord protection, not all guarantees the same level of services. What could be presented to you may not actually convert to what you need. Do not fall into this trap! To get you started, here are some of the common pitfalls to avoid:
The “Comprehensive” Trap
Many landlords fall into the trap of “comprehensive” insurance coverage in the hope of saving costs. The best insurance policies do not offer generic services usually labelled as comprehensive. It is important to understand that when it comes to huge investments like rental properties, adequate care must be taken into account. Always assess the risks involved in the area where your property is situated. Some places are prone to malicious damage while others may not be in as precarious a location.
Building Insurance Inclusion
Some property owners may also be under the impression that landlord protection insurance is part of building insurance. It is most definitely a case to case basis. Many standard building insurances cover only damages on the building and its content but do not cover losses incurred due to tenancy-related predicaments.
Bank Insurance Incentive
Some banks offer insurance coverage as some form of incentive when thinking of taking out property loan with them. These banks will offer either building or landlord insurance coverage enticing you with its seemingly low premium. Stop and examine the policy content! Many insurance policies offered through banks and other financial institutions deliver large rent default excesses. In some cases, negligible restrictive clauses may also result in claim denial. A reliable third-party insurer will ensure that your property and you are protected.
Legal Notice Delays
Some landlords are under the impression that delays in serving legal notices do not primarily affect rent default claims. Stop! For tenancies being managed personally by you as a landlord, it is imperative to serve legal notice in times of rental payment delays immediately. Serving legal notices as timely as possible affects your landlord protection insurance on rental default claims.
Absurd Maximum Coverage
People tend to like the word “maximum” when dealing with insurance coverage policies. This puts many under the usual limits which, if not assessed thoroughly, can make or break your rental business. Always assess risks involved. In most cases, it pays to be armed with extended protection from slander or libel, wrongful entry, or wrongful eviction, as well as personal injury or non-bodily injury claims.
As a property owner, there are definitely other pressing issues other than just providing a safety net for your property to lean on during trying times. Remember these common pitfalls when asking for landlord protection insurance quotes. Do not just move to protect buildings, find a safety net for yourself as well.
Want a landlord protection insurance plan tailored to your needs? Schedule a consultation with Landlord Insurance HQ now! We can assist you in customizing an insurance portfolio to satisfy your requirements. Request a quote online or call us on 1300 815 344.