Landlord insurance is a precaution Landlords take to protect their rental properties from damages. However, there may be some common misconceptions that could leave you hesitant or confused about your policy.
You only need insurance when you’ve placed a tenant
The most common risks that Landlords face and insure against occur when they have a tenant in the property, like accidental damage or loss of rent. However, there are other risks that landlord insurance covers that aren’t tenant-related, such as damage from fire, storm, flood, cyclone, theft or impact and these can occur at any time,
There is no cover while the property is between tenancies
So long as a valid policy is in place, the property is generally protected between tenancies, but it is important to know what the property is protected against. For example, if there are no tenants, the property is not covered for tenant-related matters like loss of rent or tenant damage. Also, Landlord policies also do not offer cover for market conditions, so if the landlord cannot secure a new tenant they cannot claim for loss of rent.
When a property sells, the insurance policy is transferred to the new owner
If the ownership of a property changes, the insurance does not transfer to the new property owner. Landlord insurance cannot be transferred from one owner to the next, as the contract exists between signatories to the insurance policy and no one else. When your investment property is sold or changes ownership, you or your Property Manager need to cancel the existing insurance policy.
Pets must be named on the lease
While the pet must be owned by the tenant, your insurer may not need the pet to be named on the lease. This gives Landlords peace of mind in knowing that their insurance will still be of use whether they knew there was a pet living at the premises or not.
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