Five landlord insurance questions to review, from vacant properties and tenant damage to short-term letting, rental income and policy conditions.
A rental property can represent years of saving and a substantial financial commitment. A tenant’s bond is not a substitute for reviewing the building, the owner’s contents and the liabilities associated with letting the property.
Landlord policies differ. Some benefits are optional, and limits, excesses and claim conditions can change the outcome. These five checks can help you have a more useful discussion before you buy or renew cover.
1. Keep reviewing the property while it is vacant
A property can still suffer damage or create liability exposures between tenants. Renovations, a slow letting period or major repairs may also leave it unoccupied longer than expected. Do not automatically match your insurance period to the tenancy dates.
Tell your broker or insurer about vacancy and planned work. Check the policy’s definition of unoccupancy, the period allowed and any notification, inspection or security requirements. There is no universal number of vacant days that every insurer accepts on the same terms.
2. Check pet damage, tenant damage and security separately
Permission to keep a pet under a lease does not itself confirm insurance for damage caused by that animal. Scratching, staining, odours, accidental damage and malicious damage may be treated differently. Read the relevant definitions and exclusions rather than relying on a general description of tenant damage.
If keys are missing or access arrangements change, address security promptly and check the tenancy rules before changing locks. Any reimbursement for replacement locks depends on the insured circumstances and wording; it should not be assumed to apply whenever a tenant leaves.
3. Distinguish landlord cover from owner-occupied home cover
Letting a property changes its use and introduces rental and tenant-related questions. A home policy intended for an owner-occupier may not address those exposures. Declare the actual use, including the type of tenancy and any sharing arrangement.
Possible landlord benefits include selected tenant-damage, legal-expense or rental-loss sections. Check whether they are included or optional. Rental loss following insured property damage is different from rent default, and neither means that every period without rental income is insured. For strata properties, distinguish the scheme’s building arrangements from your own contents and landlord exposures.
4. Discuss short-term letting before you start
Short stays and frequently changing guests can affect the assessment of a property. A policy arranged for a conventional residential tenancy should not be assumed suitable for holiday letting or an online booking platform.
Describe how often the property is let, whether it is also your home and who manages bookings and inspections. Check insurance acceptance as well as applicable local, strata and tenancy requirements. A platform’s protection programme is not automatically equivalent to your own landlord insurance.
5. Look beyond the premium
Location, construction, replacement values, claims experience, occupancy and selected cover can influence price. Compare policies on the same basis, including limits and excesses, rather than choosing solely by the annual premium.
Prepare the lease, property details, building and contents values, and any changes in use. Your broker can help explain the differences and identify questions that need confirmation from the insurer.
Adapted from material previously supplied for Aushine client communications. This website edition has been edited; the Chinese edition is a translation of the edited text. General information only: it does not confirm cover or take account of your objectives, financial situation or needs. Consider the applicable policy documents and obtain advice appropriate to your circumstances.
