Important Investment Property Insurance Tips
Posted on 06 November, 2017
A large number of Australians are attracted to the residential property investment market because of the substantial financial returns that are well within reach in this relatively safe environment.
This is largely because the property market is considered a wise investment when compared with traditional investment options that can’t match the leveraged growth potential of residences in prime locations over a prolonged period of time.
Residential property investors often use their properties in one of the following three ways:
- For their own use as a holiday house.
- As a full-time rental property for suitable tenants.
- As a part-time seasonal rental and for their own use on a part-time basis when it’s not rented out.
Extra Insurance Coverage for Property Investors
When a property is being used for any of the above-listed purposes, investors need to be aware that a standard home policy might not provide the coverage they need for proper protection.
Some common exclusions for investment properties in standard home insurance policies include:
- If the property is left unoccupied without approval from the insurer for longer than the standard period of time defined in the owner’s policy, the cover will automatically be restricted to a basic level.
- If the property is leased full time to tenants, then a standard home policy does not cover certain risks relating to the tenant’s occupancy. Some examples of this are: Default of Rent, Deliberate or Malicious Damage, Theft by the Tenant, and Tenants’ Pet Caused Damage. For proper protection, these specific risks will need to be insured under a Residential Landlords’ policy.
- If the property is leased on a part-time basis to tenants for short stays, particularly during peak tourist seasons, many landlord insurers will not cover the owner for tenant-related claim events. However, cover for these types of risk is available for the short term through specialist landlord insurers, such as Rent Default. This cover can also provide protection for additional risks like drug-related cleanup and garbage removal.
As you can see, securing the right investment property insurance involves a lot, which makes undergoing this task by yourself difficult. Donnellys have been guiding residential landlords through this process for more than 40 years. Contact us for assistance in obtaining the best value residential landlord property insurance today!
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