Do You Need Landlord Insurance in Auckland? Property Management Advice
Landlords are often asking us: do I need landlord insurance? We always like to remind landlords that owning a rental property is a lot like running a business. Part of doing that successfully is protecting against the potential for financial loss. These policies that provide insurance for landlords can help achieve that goal. So, we’re talking about some circumstances in which insurance is necessary, and how certain policies can help landlords, compared to what would happen if you didn’t have one in place.
Loss of Rent Due to Malicious Damage by Tenant, Eviction, or Abandonment
If a tenant has put a landlord in one of these situations, it’s highly unlikely that they will leave the property in a condition that it can be quickly re-rented without a lot of work. Repairs will be needed, and having insurance will help with the rent you’ll lose while returning the property to a rentable state.
Loss of Rent Due to Accidental Damage
Sometimes there is accidental damage to a property, which can cause things like fires and floods. In these cases, landlord house insurance is incredibly useful.
Landlord Insurance Policies
There is insurance for landlords when you need a policy that can protect you from malicious repairs, meth contamination, and also provide coverage for landlord contents. Even a property owned by a landlord and rented out still has contents that you want to protect, like drapes, blinds, carpets, dishwashers, etc.
A traditional policy that covers the structure of a house won’t cover gradual damage. However, these policies will. It’s important because tenants aren’t the best at reporting gradual damage or signs of water damage and things like that. So, this type of investment property insurance can be helpful. These policies will cost $350 NZD to $400 NZD per annum, and are tax deductible.
These are a few reasons why landlord insurance is a good thing to acquire. Still, remember to conduct routine inspections. For example, if a tenant hid dangerous goods inside the property and there is an explosion, your insurer will have grounds to deny your claim if regular inspections weren’t being conducted.
If you have any questions about insurance for rental properties or anything pertaining to Auckland, NZ property management, we’d love to hear from you. Please contact us at Walker Weir Property Management.March 22nd, 2017