Hi,
If one is renting out a home:1) Is landlord insurance necessary? I assume this form of insurance cover is different from the normal home and contents insurance?
2) Can the value of the building the purchase price of the house?
3) There was a question I got while getting an online quote regarding whether I wanted to purchase worker’s compensation to cover those who are managing the property – is this necessary?
4) When should the landlord insurance be purchased? before or after the property management agent has confirmed a tenant?
Thanks
Hi Vernon,
This one comes up quite a bit and you will get a full discussion if you try the search function.
Obviously its about mitigating loses. I vote yes for landlords insurance. Others vote no.
Just read your policy and don’t expect it to cover things that it does not. Excesses can be large and as you will read there are issues with the way events are defined so check those out.
Usually landlords insurance is to cover fittings and or contents and loss of income. It is to supplement you building insurance not replace.
Good Luck.
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NZ Investors & Property Spotters
Renovations & Project ManagementHi Vernon,
In answer to your question:
Is landlord insurance necessary? I assume this form of insurance cover is different from the normal home and contents insurance?Some people don’t look at landlord’s insurance as a priority until they get their fingers burnt. I got my fingers burnt and for the extra few dollars a month that I now pay it is worth it! Not only to cover loss of rent or something but also for peace of mind. Just be aware that you have to have specific insurance for loss of rent vs damage to property etc and that in some instances you might have to pay excess.
Good luck!
krsHi Vernon,
Just my personal thoughts and opinions but here goes:
1) I wouldn’t be without landlords insurance for an investment property and yes it is entirely different from home and contents insurance.
2) This won’t be part of your landlords insurance but as I understand it you can insure the building for whatever amount you choose. The insurance company will probably recommend a value based on some questions they will ask you when you take out the cover. Don’t under insure as you will loose out if the worst does happen but don’t over insure as you’ll be wasting $$$ in high premiums and most likely the worst will not happen.
3)Huh??? Never been aware that I needed worker’s compensation to cover the PM. Most landlords insurance policies require that the property is managed through a professional PM and I have assumed that the REA they work for took care of their worker’s comp.
4) No need for landlords insurance unless there is a tenant. Building insurance is a must from settlement.
Sonja
You can buy policies that combine both forms, that is, building as well as landlords. AAMI, NRMA & CU provide combined insurance cover. It seems a less expensive way of doing it especially with AAMI.
IT would be worthwhile having the protection and it is an expense.
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