Home building insurance generally only covers losses to the building and frequently excludes damage or theft caused by tenants, which is why it is important for landlords to also have landlords insurance.
Landlords insurance provides the landlord with protection against the additional risks that may stem from the property being tenanted. Some of the biggest concerns for a landlord can include damage to property caused by the tenant, and a loss of rental income due to the property becoming uninhabitable or a tenant suddenly leaving or not paying rent. Where landlords insurance is in place it provides the landlord with the comfort of knowing that these risks are addressed.
As agents, you need to constantly strive to add more value to your suite of services, and by discussing the importance of landlords insurance you're providing an additional service that benefits both you and the landlord. Landlords insurance adds value to your rent roll because it diminishes risk from lost income. It also makes that uncomfortable call to the landlord about damage or loss of rent from the tenant you selected a lot easier because you are offering them a solution to the problem.While agents are not expected to be risk experts, discussing the risks a landlord faces and managing that risk with insurance is best practice.
Every landlord should have landlords insurance: it generally costs less for a year's cover than the average weekly rent in NSW, and most policies provide protection of up to $50,000 for loss of rent and tenant damage, plus up to $12,000 cover for losses arising from rent default. By introducing an insurance product to the landlord, any insured losses with the property go through the insurance provider, saving you valuable time.
Encouraging your landlords to take out landlords insurance really is a no brainer. It’s in their best interests and in yours too.