Do you need landlord insurance?

What is landlord insurance?

A landlord insurance agreement usually covers the owners of a property for any damage to the building from events such as fire, flood or storms. It also covers the contents of the building, such as curtains, carpets, light fixtures, built-in wardrobes and kitchen cupboards.

If your tenant or their guests hurt themselves on your property and they make a claim against you, landlord insurance. Or, if your tenant turns nasty and vandalises your property or leaves without paying the rent, your insurance policy can cover that, too.

What doesn’t it cover?

Landlord insurance provides no coverage on such things as trees, shrubs, grass or anything growing in the ground. So, if you’re about to rent out your house with its prize-winning azalea garden, beware.

Horror story, anyone?

Domain senior product manager Melanie Hoole rented out her family home to the tenants from hell. “They tampered with every electronic device; they broke the alarm. They drilled through the floor to install wiring,” she says. “The dogs – which we hadn’t given permission for in the contract – scratched up the floor. There were broken windows and tiles. It took us a day to realise a whole window pane was missing. The pool turned green, as they’d stopped cleaning it.” The nightmare tenants then refused to leave the house; it took seven weeks for Hoole to evict them. By then, they’d caused $13,000 in damages.

Fortunately, Hoole had landlord insurance, which had come up for renewal just before the tenants were due to move out. As she already had her suspicions about the renters, she’d decided to renew the insurance. “The insurers were fantastic,” she says. “They paid out everything.”

As a result, Hoole would recommend landlord insurance to anyone, because “you really never know”.