How to ensure your home is protected with landlord insurance

TENANTS charging smartphones that can lead to a house fire is one of the things that can go wrong when a property is leased out, and why landlord insurance is a must.

TENANTS charging smartphones that can lead to a house fire is one of the growing list of things that can go wrong when a property is leased out.

Landlord insurance specialist Terri Scheer’s insurance distribution manager Belinda Butler says in the worst-case scenario these incidents can result in massive damage bills.

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“People charging up their phones can result in it heating up too much and the bill can run up to a few hundred thousands of dollars damage if the whole building is damaged,’’ she says.

“In one case it was building and contents insurance that was required to cover damage for that property and everybody does it, we all charge our phone.”

Reviewing landlord insurance is important to ensure you’re covered if something goes wrong with the tenants.

But she says the most common claim on insurance policies is rent loss — either they leave without paying rent or they might be evicted from the property or the property can’t be rebuilt.

Butler says landlord insurance can cost as little as a few hundred of dollars per week and says for some owners “it’s less than one week’s rent.”

“Landlords should consider insurance because there are things that can go wrong in a tenant’s life that they can’t prevent,’’ she says.

“They should check their insurance policy and make sure it’s correct and up-to-date and check the coverage, for example for rent default, malicious damage and accidental damage and theft.”

She also urges owners to ensure that the sum the insured is sufficient and be aware that as an owner the cost of the policy is tax deductible.

Landlord insurance is a tax-deductible cost for property investors

Megan Crannaford, 26, recently rented out her three-bedroom property after she purchased a new home and says landlord insurance was vital when she moved out.

“It’s important to have it in case the tenant does a runner, you are covered for rent and you are covered if they demolish the house and you have to rebuild,’’ she says.

“From the outside to inside, top to bottom you are covered no matter what happens, I would not go without landlord insurance because if something happens you’ve got to fork it out of your own pocket.”

She paid about $800 for her policy and the cost is tax deductible.

Understand Insurance’s spokesman Cambbell Fuller says the start of the new financial year should be a timely reminder for investors to review their insurance cover.

@sophieelsworth