For you landlords who are about to rent your home to new tenants make sure that the most common landlord insurance claims cover you. Your houses are your investment and for many serves as a source of income. Standard building and content insurance generally do not protect you from tenant related risks, but landlord insurance covers you.
Here, we have coined up some of the most common landlord insurance claims that you should be aware of.
- Loss of rental income
Unexpected outcomes can sometimes cause your best tenants to leave unable to pay the rent. It may be losing their job or some accident or sickness that’s causing them to spend all their earning on hospital bills. Whether it’s intentional or unintentional, losing your rent can have a bad effect on your investment. This is the number one claim that’s most common.
Failing to pay the rent for a long time will end by the termination of the tenant’s lease by the court. Your tenant might also abscond failing to pay rent or vacate without any notice.
Having a landlord insurance claim can help you cover for the loss you incur is such a situation. If a tenant is released from the obligation to pay rent by the court due to financial hardship, then you will be covered by the insurance. If you evict your tenant with a court order, then you can claim an amount for the replacement of your locks and keys.
2. Damages to your home
The damages to your home can amount to a significant total considering the repair and replacement costs. Some of the most common damages the landlord’s face are given.
a. Accidental damage
These damages are bound to happen, and there is no way that you can avoid it. The risk can be minimised by properly vetting your tenants. If you rent your home to kids who love to party, it automatically increases the chance of damage to your home.
Or when giving it to a couple with a child, the kid may drop something heavy on the floor which can result in cracked floor tiles. Stained carpets, broken television, damaged furniture are some of the accidental damages that any landlord is likely to face. In such an event, a proper landlord insurance claim can be invaluable.
b. Storm damage
Storms are a natural phenomenon and are bound to occur. Understanding the risks, it is best for a landlord to have a proper landlord insurance claim. Sometimes precautions are the best solution.
Check for loose tiles or breaches on your roof and have them repaired. Also, conduct proper maintenance of the pipes and gutters to check that they are unblocked, secured and sturdy. Reinforce your doors and windows and bring inside anything that might break.
c. Malicious damage
There is nothing you can do if a drunk man passes by and throws a rock at your window. Your tenant might get angry and punch a hole through your wall, kick your doors and destroy your floors and carpets. Without a proper insurance claim, you would be in trauma on what to do with the massive cleanup and replacement cost.
A landlord insurance claim covers the malicious damages caused by your tenants, their guest or outsiders.
d. Water damage
Flood or storm damages do not cover water damages. It deals with damages incurred dues to leaks, sinks, burst pipes, etc. Especially during winter, the water inside the pipes solidify and can lead to damage. Due to the excessive costs that may occur many home and contents insurance providers does not cover it.
3. Death of sole tenant
Though tragic, a sole tenant dying with rent unpaid is very common. Landlord insurance covers you for the loss that you incurred due to that tenant’s death.
Your rented house may be subjected to burglary by the tenant, tenant’s guest, tenant’s family or any outsider breaking in. All theft incidence must be reported to the police. But, a good landlord insurance claim can help to insure yourself against theft or the damages that have been caused while the burglary was carried out. Be sure to check out the claim limit for open-air content.
5. Legal liability
If a tenant ends up being hurt and blames your property for it, then landlord insurance could pay off the cost and legal fees as per the policy limit. An example to make things more clear. Say, your rental has a loose piece of flooring, and a tenant trips on it and breaks something or gets hurt. In such a situation, insurance claims cover all your payment.
Landlord insurance providers are your financial protectors against different adverse situations and should be seriously taken by every investor.
Emma Sneddon, a freelance writer and an independent blogger. She mostly writes about sustainable and alternative living solutions. She likes to write in the most effective ways to drive new sales and revenue for local business. She is a frequent article contributor for Australia’s best investment property insurance provider. You can check her out on Twitter.