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Your Guide to Landlord Insurance Costs, Cover and Lingo

23 Dec2020

If you’ve got tenants renting out your investment property, you’ll want some peace of mind in case something goes wrong. This means more than just having a model tenant — it can also include having insurance in case something doesn’t exactly go to plan. Landlord insurance can help protect your investment from unexpected costs and financial risks in case the unexpected happens.

What is landlord insurance?

Landlord insurance is a type of insurance designed to help protect investment property owners from the financial risks that come with renting out a property. Some risks that landlords face is that tenants might not pay rent, may damage your property, or might refuse to vacate once their tenancy agreement is over. Landlord insurance can help cover some of the costs associated with these events.

What does landlord insurance cover?

When you’re looking into landlord insurance, it’s important to pay attention to what each policy covers. Some policies cover the building only; some cover the contents inside it that belong to you (the landlord); and some policies cover both. When you’re weighing up what kind of cover suits you, it’s important to check the fine print and consider your own unique needs and financial situation.

At People’s Choice, we’ve teamed up with CGU to provide our members with Landlords Residential Property Insurance. We offer cover to protect your building and/or your contents, with the choice to get additional cover for what matters to you.

What is a ‘building’ and what is ‘contents’?

With Landlords Residential Property Insurance through People’s Choice, you can choose to cover your building only, your contents only, or combine your building and contents cover under one policy.

Building: Your building is more than just the dwelling your tenants live in. It also includes anything attached to the building (like a deck or garage), plus, any improvements or renovations.

Contents: For landlord insurance, contents are the things you (the property owner) leave in the home that aren't fixed or installed, like a lawnmower or wheelbarrow. The exception is carpets and curtains, which are also considered contents items. For landlord insurance, this doesn’t include contents owned by the tenant. These items need to be insured by the tenants themselves under their own contents insurance policy.

Standard insurance cover

If you get landlord insurance through People’s Choice, you’ll be covered for:

  • Flood,
  • Fire,
  • Explosion,
  • Earthquake,
  • Storm,
  • Rainwater,
  • Wind,
  • Tsunami,
  • Theft, and
  • Liquid damage.

There are also a few other situations in which you would be eligible for cover which you might not find on other forms of building or contents insurance. This is because, as a landlord, you have someone else living in your property who may be responsible for damage to the property or its contents. With Landlords Residential Property Insurance through People’s Choice, you’re covered against*:

  • Deliberate damage to your building and/or contents by tenants, plus
  • Deliberate damage to your building and/or contents by guests or visitors of the tenant.

This cover is designed to help cover the costs that come from repairing damage, or from the loss of your property, if your tenants are at fault. This means you can have some peace of mind that you’ll have some financial help if the unexpected happens.

Additional insurance cover

You can also get some additional cover through People’s Choice’s Landlords Residential Property Insurance to help reduce the costs of demolition and clean-up in case your property is lost. This amount is up to 10% of the amount you insure your building or contents for. Similarly, you can also get cover for the cost of employing an architect or surveyor and any legal fees that arise from the rebuilding of your home — again, up to 10% of your building sum insured.

Optional additional cover

Depending on your policy, you can also get landlord insurance to cover some other costs which might pop up. It’s always important to check the fine print and consider your unique needs and financial situation if you’re comparing additional cover options. You can find our most up-to-date summary of Landlords Residential Property Insurance cover here, or give us a call on 13 11 82 to have a chat about your needs.

Here are some extras you can get insurance cover for through People’s Choice:

  • Loss of rent: if your property is lost or damaged as a result of a listed incident and becomes uninhabitable as a result, CGU will cover loss of rent for up to 12 months*
  • Strata title mortgage protection: CGU will cover the amount you must pay to settle your mortgage following loss or damage to buildings that you own as a result of an agreed incident under a strata title or similar plan*
  • Legal liability: CGU will cover your legal liability as a result of a listed incident that causes loss or damage to someone else's property, or death or bodily injury to other people, during your period of insurance. You can choose from $5 million, $10 million, $15 million or $20 million of cover. You can find a list of incidents which are covered in the product disclosure statement*.
  • Rent default and theft by tenant: During the current COVID-19 pandemic, a decision has been made to switch off the Rent Default and Theft by a Tenant options across all IAG brands until further notice. CGU is not offering cover for Rent Default and Theft by a Tenant on new policies right now, so you can’t add it as an optional extra. There’s no change to your cover if you already have a landlord Residential Property insurance policy*.

What does landlord insurance not cover?

There are some instances where — even if you are a landlord — you might not be eligible for landlord insurance. You might not be eligible to get insurance online though People’s Choice if your property:

  • Is currently threatened by fire
  • Is for sale or being demolished
  • Is listed by the National Trust, classified as Heritage Listed or as an Historical Building
  • Has suffered an earthquake in the past 3 days
  • Will be unoccupied for more than 60 consecutive days in the future
  • Is used for farming, with an annual turnover greater than $10,000, or other primary production

If any of these criteria apply to you, give us a call on 13 11 82, or come and see us at a branch to have a chat about your individual needs. Likewise, contact us if your property is used as any of the following:

  • A bed & breakfast
  • A boarding house
  • Used for business other than for rental purposes
  • A display home
  • A hostel
  • A houseboat
  • A nursing home

Do I need landlord insurance?

If you aren’t a landlord: no.

If you are a landlord, you should assess your financial situation and unique needs before making a decision.

If you still aren’t sure if landlord insurance is right for you, feel free to reach out to us on 13 11 82, or visit us in one of our branches to have a chat about your needs.

*Subject to the product issuer’s underwriting rules and acceptance guidelines. Policy conditions, limitations and exclusions apply. Please read the Product Disclosure Statement (PDS) for full details. Terms, conditions and exclusions apply and are available upon application.

The information above is general advice only and does not take into consideration your personal objectives, financial situation or needs (“your personal circumstances”). Please consider the relevant Product Disclosure Statement (PDS), other Disclosure Documents and your personal circumstances before making any decision to purchase the products. Contact us on 13 11 82 with any questions, or visit your nearest branch to talk to a consultant.

Landlord insurance is issued by Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance.

People’s Choice Credit Union, a trading name of Australian Central Credit Union Ltd. ABN 11 087 651 125 Australian Financial Services Licence 244310, acts under its own Australian Financial Service Licence and under an agreement with the insurer Insurance Australia Limited ABN 11 000 016 722 AFSL 227681 trading as CGU Insurance.

Get a landlord insurance quote

If you’re feeling confident that landlord insurance is something you need, you can get a quote on landlord insurance through People’s Choice and get an idea of what it might cost you.

We’re happy to provide everyone with a quote, but to take the quote to policy, you need to be a member of People’s Choice. You can click here to get more information on membership or easily apply to become a member.

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