You’ve worked hard to purchase an investment property that will contribute towards growing your wealth. Although not a legal obligation, it makes sense to protect this asset and allow it to grow in value – right? This Think Property & Co blog unpacks what rental provider insurance entails, and why it’s worth investing in a policy.
So what is rental provider insurance?
Formerly known as landlord insurance, rental provider insurance is the coverage that will protect and reimburse you should something happen to your investment property. While every care is taken to vet and select the right renter, accidents can occur and cause damage to the home. Likewise, we are also not able to control natural disasters and the damage incurred from flooding, fires and earthquakes can be costly to remedy.
Insurance policies generally offer coverage options for your building (the structure of the property), contents (furniture or furnishings you provide for your renters), or both! Make sure you carefully read all Product Disclosure Statements to ensure the policy is suitable for your rental property and matches your needs. Your property manager can also offer insight into what they consider are the biggest risk factors associated with your investment.
Why is it worth investing in a policy?
So many reasons! We outline the most important scenarios in which you should consider protection:
- Loss or reduction of rent
Your policy can protect your rental income, covering losses if a renter cannot make their payments or terminates a lease early. This can extend to circumstances where your rental property is uninhabitable and therefore cannot generate an income.
- Damage to the property
Accidents are an inevitable part of life, so it’s important your policy covers the aspects of your property that are most valuable. Often termed ‘events,’ policies can include accidental damage, impact damage, vandalism, theft and even out of pocket costs should you have to take legal action.
You can also protect your property against natural events, such as storm and rainwater, flood, fire, and earthquake damage. Policy providers will take into account natural disaster zones, crime rates and other factors in your area when determining the right insurance for you.
- Lock replacement costs
While highly important, keys are also very small and prone to wandering away on their own! If you find your locking devices are lost, stolen, or not returned upon termination of a tenancy, an insurance policy with lock replacements included will allow you to quickly remedy the problem and restore security to your property.
If you have to settle a rental dispute in court, having a policy that covers your legal fees can be very reassuring and allow you to pursue the best outcome.
Ultimately, you want to select a rental provider insurance policy that addresses your investment’s biggest risks. Think Property & Co can assess your property and inform you of these risks, so you can make the right decisions and enjoy peace of mind. Don’t hesitate to reach out to our team with any questions regarding your asset – we’d be delighted to help!