10 reasons landlord insurance is vital

Property investment continues to be a popular way for Australians to build long-term wealth, and with the right protections in place, it can be a rewarding journey. While every rental property comes with responsibility, being prepared makes all the difference. 

Landlord insurance plays an important role in protecting investments and giving you confidence as a property owner. From everyday risks to the unexpected, the right cover helps landlords focus on the benefits of investing, rather than the “what ifs”. 

With a well-insured property, landlords have taken a smart, proactive step to safeguard their asset and income. 

Still wondering if landlord insurance is worth it? Here are 10 reasons why protecting your investment property makes sense. 

No-one needs insurance – until they do! 

Insurance can feel unnecessary if a claim is never made, and self-insuring may appear to be a way to save money. In reality, those savings are often short-lived. A single unexpected event at a rental property can result in repair costs and lost rent that far exceed the cost of premiums. Landlord insurance is competitively priced, designed to cover common rental risks, and provides extra peace of mind for property owners. In many cases, premiums may also be tax deductible, making it a practical investment. 

Beyond your control 

Even the best tenants can face circumstances that prevent them from paying rent, such as unemployment, illness, divorce or separation, or even death. These situations are often unexpected and entirely beyond your control. The right landlord insurance policy can help protect your rental income by covering lost rent in these circumstances. 

Not paying and not leaving 

On the flipside, there are some tenants who turn out to be far from ideal. Renters “doing a runner” can leave a landlord thousands of dollars behind. And, if you have a tenant that decides to not pay, and will not leave either, then there is a whole other world of financial (and legal) pain to deal with. It is not uncommon for these types of problems to take months to resolve, during which time you are not receiving any rental income. Specialist landlord insurance offers cover for rental losses.  

Accidents happen 

You know the thing about accidents? You simply cannot predict them. You can have the best tenants in the world, but your rental might suffer accidental damage. Things get spilled, things get knocked, things get broken. It just happens. And while your tenants may be responsible for fixing the damage, having landlord insurance with accidental damage cover provides a financial safety net, especially if the damage is substantial and it is not reasonable to expect the tenant to be able to pay the costs (for example, a tenant accidentally drops something heavy on floor tiles causing them to break). 

Weather woes 

Mother Nature can be very unpredictable and there is no telling what will happen when wild weather strikes. Bushfires, storms, cyclones, floods and hail can all cause significant property damage. Without insurance, you are left to pay for the repairs yourself. And do not forget, you may also suffer loss of rent if your tenants must move out because of the damage. 

Water works 

You might be surprised just how often landlords need to make a claim for damage caused by a water pipe bursting and flooding the home. One burst pipe can result in thousands of dollars in repairs. Landlord insurance can cover water damage, if the cause of the damage is an insured event. 

I will sue! 

If someone is injured on your premises, or suffers property damage/loss, you could be held liable. Legal liability claims can stretch into the hundreds of thousands of dollars – landlord insurance can provide you with cover stretching into the millions.  

See you in court 

It is not something anyone wants to think about, but as a landlord you just may find yourself having to go to court, or appear before a tribunal, over a loss of rent matter. Although your agent's tribunal representation fees can be reasonable, anyone who has ever had to engage a lawyer at a higher-court knows the fees can be eye-watering. With the right landlord insurance, legal expenses may be claimable. 

Theft and vandalism 

Break-ins unfortunately happen and theft can result in damage to your property and contents. Tenants (or their guests) may also steal fittings or fixtures or cause malicious damage during or at the end of a tenancy. Without the right insurance, the cost of replacing stolen items and repairing damage falls entirely on the landlord. A specialist insurance policy can help cover theft, vandalism, and malicious damage, protecting both your property and your financial position. 

Protection against illegal activity (including drug-labs)  

While rare, some properties are used for illegal activities such as operating a drug lab. These situations can cause extensive structural damage, contamination, and significant clean-up costs. The property may also be uninhabitable for an extended period while clean-up takes place. Depending on your policy, landlord insurance can cover the cost of clean-up, repairs, and associated losses arising from illegal activity. EBM RentCover is one of the few providers that offers protection for these complex and potentially devastating scenarios, giving landlords added peace of mind. 

Every investor wants a secure investment and reliable tenants. But sometimes not everything goes to plan. And some events cannot be controlled. What can be controlled is whether you have the safety net that comes with landlord insurance.  

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.