Investors often inquire as to whether they can survive without landlord insurance. It is an additional cost each year to investors which is a deterrent, however, the security which this gives you is invaluable.
Insurances cost $300-400 pa and can cover substantially more when the unexpected happens. For example, if a tenant abandons a property, you can claim for loss of rent, damages and in some cases even advertising.
Insurance is in place to help you recover from the unexpected. When no income is coming in for your property, it leads to a difficult financial situation. This ensures that you don’t experience income deficit for an extended period of time, therefore impacting other investments, your lifestyle or future lending.
Risks for investments are often minimal, however, these are unavoidable. The best process is for the landlord to have confirmation that they are protected. Being an investor should be an enjoyable time. Not something that is plagued by income stress or damage to your property.
Recently our office has worked with a client that discovered that they were not insured. This was found when the tenant had stopped paying rent. The tenant then had to be removed from the property and caused over $2000 damage. Generally, this would have been an insurance claim with the funds paid out around 3 weeks after submission. However, due to not having protection, we are proceeding through debt collectors. This is now a drawn-out process to try to get funds back, with some significant expenses to do so.
If you are unsure if your landlord insurance covers yourself, please contact us today and we can help you through the process. Ensuring your property is protected is vital for both your investment process and your income.