Do I really need landlord’s insurance? It’s a question that’s probably crossed every property investor’s mind at some point. The answer? A resounding yes. Landlord insurance is a small, tax deductable expense that could save landlords thousands of dollars in the long run, making it a must for all property investors
Need specifics? Here are all the possible circumstances landlord’s insurance will cover you for.
If your tenants’ circumstances change
Even if you’re agent has done their due diligence and picked the best tenant, you’re still not guaranteed smooth sailing. A tenant’s circumstances can change and that can affect them financially or how they look after the place.
In the event of an accident
Landlord’s insurance will also cover you for unexpected natural disasters or accidents in the home. Breaking or leaking water pipes, and area fires and floods can and do happen. Insurance acts as a safety net, giving landlords peace of mind by providing them with he ability to cover their mortgage repayments while dealing with the stress of disasters.
If your tenant has pets
Pets can be another big (but adorable) issue for landlords, particularly as more tenants are being allowed to have pets in their property. In fact, more and more insurance companies are actually increasing the benefits they are now paying out for damaged caused by pets in properties.
If your property is being sublet
Subletting is another potential problem for landlords. If your tenants have organised someone who isn’t on the lease to live in the property, they might not treat the property as well as someone who your property manager vetted prior to approving them for the property. As they are not on the lease they can avoid being held accountable for any damages they may have caused, this is where landlord insurance can assist you also.
Any out-of-pocket incidentals
And finally, landlord’s insurance will cover you for any minor incidentals that may come up. Say, for instance, your tenant had to move out unexpectedly. The insurance will cover for the loss of rent, as well as for any cleaning, repairing, leasing and advertising fees you may be subjected to.
Moral of the story? Landlord insurance should be an automatic part of every property investor’s portfolio.
It’s always advisable to double-check the fine-print to ensure the policies covers you for the basics. While landlord insurance policies do vary, they usually only cost a few hundred dollars a year, which is a very small price to pay for peace of mind, don’t you think?