In the vast landscape of insurance options, there's coverage for everything, from pets to cyber-attacks. Your real estate agent may have emphasised the importance of Landlord Insurance, and it is common for some property managers to require it for the management of your investment. But what exactly is Landlord Insurance, and is it necessary?
Defining Landlord Insurance:
To understand what Landlord Insurance is, it helps to clarify what it is not. Unlike building insurance, which protects against property damage from incidents like fire or floods, Landlord Insurance is tailored to cover landlords from unexpected expenses arising from tenant-related issues or accidents in the property.
Policy Variations:
Not all Landlord Insurance policies are created equal, and it is crucial to compare them side by side to identify differences. Creating a comparison table with key factors such as coverage for lost rent, lock replacement, contents replacement / repairs, liability, pet and tenant damage, earthquake or tsunami events, excess, waiting periods, and annual premiums can reveal variations between policies.
Considerations for Short Stay Market:
For property owners venturing into the short stay market, it is essential to be aware that not all insurance policies may provide adequate coverage. Some insurers may not explicitly state that offering your property on platforms like Airbnb could affect your coverage.
Why Landlord Insurance Matters:
In the current real estate landscape, having Landlord Insurance is arguably more crucial than ever. In Victoria, there is a significant backlog at the Victorian and Civil Administrative Tribunal, causing delays of up to two years in settling disputes between landlords and tenants. What adds to the frustration is the shift in decisions, with cases that historically favoured landlords now often ruling against them.
Facing Unprecedented Challenges:
Experienced agents express bewilderment at the outcomes of recent hearings, and to address the backlog, it is anticipated that hearings may occur without the physical presence of either party next year. The question arises: Can these "on the paper" hearings truly ensure fairness for both landlords and tenants?
In conclusion, as the real estate landscape continues to evolve, having Landlord Insurance becomes not just a recommendation but a crucial safeguard against unforeseen challenges. Whether it is navigating the intricacies of short stay markets or facing uncertainties in dispute resolutions, Landlord Insurance serves as a vital tool in protecting your investment and financial well-being.
If you own a Melbourne inner-city investment property and are unsure if you are getting the right advice, we would love to speak to you.
Please call Re-define Real Estate on +61 3 9000 0678 or email us on hello@re-define.com.au.