Are You Underinsured? A Landlord’s Guide to Property Protection
Recent industry reports reveal a concerning trend: over half of Australian landlords believe they’re underinsured. If you own an investment property, understanding proper insurance coverage isn’t just advisable – it’s essential for protecting your asset.
Why Landlord Insurance Matters
Standard home insurance isn’t enough for rental properties. Landlord insurance provides specialized coverage that protects against:
- Tenant-caused damage to property
- Loss of rental income from defaulting tenants
- Liability claims from injuries on your property
- Property theft or malicious damage
Despite record-low rental vacancy rates (just 1% as of December), the risks of property damage and income loss remain significant. While high demand means approximately 65 potential tenants for every vacant property, this doesn’t eliminate the need for comprehensive protection.
Common Tenant Damage Issues
Property managers frequently report these typical damages:
- Carpet stains, burns, and excessive wear
- Pet-related damage including scratches and stains
- Wall damage, unauthorized painting, and holes
- Damaged flooring, broken tiles, and scratched wooden surfaces
- Broken appliances and fixtures
- Water damage from overflowing baths or indoor plants
While tenant bonds provide some protection, they often fall short of covering major repair costs. Without proper insurance, landlords frequently face thousands in out-of-pocket expenses.
Understanding Policy Coverage
When selecting landlord insurance, be aware that:
- Not all types of damage are covered under standard policies
- Minor claims may fall within your policy’s excess
- Certain exclusions apply, such as general wear and tear
- Pet-related damages may require additional coverage, especially as tenancy laws increasingly protect tenants with pets
Legal Responsibilities
As a landlord, you have a duty of care to maintain safe conditions for tenants and visitors. Landlord insurance includes liability coverage, protecting you from potentially costly legal claims and associated expenses.
Choosing the Right Protection
Every rental property has unique risks. Properties in areas prone to natural disasters may need additional coverage. Working with an insurance broker ensures you get:
- Coverage tailored to your specific property needs
- Clear understanding of policy inclusions and exclusions
- Guidance on appropriate coverage levels
- Support during the claims process
Don’t risk being underinsured. Contact us to review your current coverage and ensure your investment property has the protection it needs.
If you’d like to know more about how to better manage the risks of your investment property CLICK HERE.