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Why is landlord insurance so important?

Buying an investment property is an exciting step, so it’s important to understand how to protect it with landlord insurance.

After purchasing an investment property, some of the next steps include finding a good tenant and considering the levels of cover the property may need. Landlord insurance may cover your unforeseen repair bills due to damage by an insured event and possible loss of rent if the home is unliveable. If you have a mortgage on your investment property, some lenders may require proof of building insurance as a part of their loan settlement requirements.  This helps protect you, as well as the lender, against the financial risks caused by unexpected damage or loss to your property. 

What is landlord insurance?

Landlord insurance is specifically designed to protect your investment property from loss or damage caused by insured events and loss of rental income. Insured events can include things like fire, storm and flood, and depending on the insurer, can include damage or theft by tenants – or these may be optional.

Does landlord insurance cover loss of rent and rent default?

Horror stories of tenants destroying a property make the news. Not only is the landlord burdened with the cost of repairs, they also have the additional stress of going weeks, or months without rental income. 

Thankfully, some landlord insurance policies will cover the damage by tenants and loss of rent when the building becomes unliveable due to loss or damage from an insured event or if your sole tenant passes away. It’s worth checking with your insurer first as cover levels vary. 

Rent default is different from loss of rent from an insured event, and may be optional, where you need to add it to your policy to have protection.

As a landlord, having a tenant refusing to pay rent, or vacating your rental property without giving you notice can be a stressful experience. Rent default can help to cover you when a tenant leaves your rental property without notice, is legally evicted from your property, or stops paying their rent, providing you with stability of earnings while you find a replacement tenant. Having a formal lease in place is important and bond money paid that equals at least four weeks rent, as this may be a condition of your policy. Read through your policy’s Product Disclosure Statement (PDS) to see if rent default and cover for loss of rent are included in your landlord insurance policy and any conditions, limits or exclusions that apply.

Even good tenants can cause damage

Most tenants want to do the right thing, but of course, the unexpected can happen. A harmless game of backyard cricket can end with a ball smashing through the kitchen window, and a hose that bursts on a washing machine could flood the ceiling of the apartment below resulting in huge repair and replacement bills.

That’s why it’s worth considering landlord insurance that includes things like accidental glass breakage, water damage and liability cover. Check your policy’s PDS to ensure the cover is right for you.

Protect your investment property from these #RentalFails

You wouldn’t believe what happens next. See why it’s important to consider protecting your property with landlord insurance with these ‘#RentalFails’ videos that show some of the crazy things your tenants could get up to or some of the extreme weather that could hit your investment property in Australia.

View more #RentalFails

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This information is current as at date of publication and is subject to change.

ANZ Landlord Insurance is issued by QBE Insurance (Australia) Limited (ABN 78 003 191 035, AFSL 239 545) (QBE) and distributed by ANZ under its own license. ANZ recommends that you read the ANZ Financial Services Guide (PDF 179kB)ANZ Landlord Insurance Target Market Determination (PDF 208kB) and ANZ Landlord Insurance Product Disclosure Statement and Policy Document (PDF 709kB) (available online or by calling 13 16 14) before deciding whether to acquire, or to continue to hold, this product.

Although Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522 AFSL 234527 distributes these products, ANZ does not guarantee or stand behind the issuers or their products.

This information is of a general nature and has been prepared without taking account of your objectives, financial situation or needs. You should consider whether the information is appropriate for you having regard to your objectives, financial situation and needs. 

The ANZ App is provided by ANZ. Super, Shares and Insurance (if available) are not provided by ANZ but entities which are not banks. ANZ does not guarantee them. ANZ recommends that you read the ANZ App Terms and Conditions available at anz.com and consider if this service is appropriate to you prior to making a decision to acquire or use the ANZ App.

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