Unfortunately, many rental providers still overlook the need for insurance for their investment properties. It cannot be emphasised enough that the benefits far outweigh the costs of a policy and like any insurance, it’s not until something goes wrong that you realise you need it (or needed it).
There are a few key components to a reliable investment insurance policy, so it’s important to shop around and make sure the policy you purchase, covers the basics you need.
What should I look for when choosing an insurance policy for my investment property?
There are three main considerations when selecting an insurance policy:
- Price
- What is covered and what isn’t (inclusions and exclusions)
- What the provider's claims process looks like
Price
When researching any type of insurance policy, price and value are big factors. So what does good value landlord insurance look like?
You want as many inclusions as possible for the best monthly or annual premium as well as reasonable excess for claims.
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What is covered in my insurance policy?
Along with general inclusion such as building cover, contents cover, accidental breakage, event cover for floods and storms, and liability and landlord cover you should be on the lookout for additional inclusions such as:
- Malicious damage by a tenant or guest
- Theft by a tenant or guest
- Loss of rent due to tenant default
The claims process
Hopefully, you never have to make an insurance claim though if you do you want a streamlined process all in one place.
Online claims processes where you submit your claim and upload all relevant documentation is the preferred method by many claimants though it's important to be able to reach a 'real' person if you have any queries, so keep that in mind when selecting your insurer.
A list of preferred repairers plus the flexibility to select your own, 24/7 support and access, waiting periods, and easy access to claim documents are other considerations.
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Different types of rental provider insurance
There are also different kinds of insurance depending on the type of property you have.
A property on a strata title needs a different approach to a stand-alone property as there is usually more common property involved and shared facilities such as driveways, pools, gyms, and walkways that require coverage.
A property that is furnished or has had significant investment in gardening or landscaping may also need contents insurance with specific questions asked around damage or loss to property such as furniture or plants.
There are also big-ticket items like fires, floods, or an accident that impacts the renter. A personal liability claim because your renter tripped on a paver and suffered a nasty injury can be disastrous to everyone involved and good insurance may be your only saving grace.
It is a good idea to contact your Neilson Partners property manager for recommendations or ask someone you trust who their policy is. Researching to find a policy you like is important but there’s no better solution than first-hand experience from a trusted source.
