Australian property owners are increasingly putting themselves at financial risk. The 2013 Understand Insurance Research…
Loss of rent remains the number one headache for landlords and accounts for more than 50% of insurance claims, according to leading landlord insurance specialist, Terri Scheer Insurance.
Figures from Terri Scheer Insurance for the 2014-2015 financial year to date shows more than half of claims (53%) made by policy holders during this time were for loss of rental income.
Terri Scheer Insurance, Executive Manager, Carolyn Parrella, said absconding and defaulting tenants can leave landlords thousands of dollars out of pocket, if they’re not adequately insured.
“Loss of rent continues to be the number one insurance claim made by landlords,” she said.
“More than half of claims made by landlords were caused by absconding or defaulting tenants.
“A tenant who falls behind in their rent poses one of the greatest financial risks to landlords. Arrears can be a very long and costly process to resolve.
“Many landlords are still unaware and unprepared for these risks.
“Uninsured landlords really need to think about how they would manage financially if their rental income halted for several weeks.”
Ms Parrella said malicious damage caused by tenants was the second largest issue for landlords.
“Malicious damage covers everything from holes punched in walls and doors that have been kicked in, through to intentional damage to carpets and floors,” she said.
“Tenants who damage a rental property can leave landlords with large clean up bills and significant replacement costs.”
Water and storm damage, legal liability claims, as well as theft were other notable claims for 2014-15.
“A specifically designed landlord insurance policy will help to ensure you are not left out of pocket should these unforseen events occur,” Ms Parrella said.
“This includes covering for risks like malicious and accidental damage, loss of rental income and potential legal liability.
“A standard building and contents insurance policy generally won’t cover landlords for many of these risks.”
Top ten claims for landlords:
- Loss of rent
- Malicious damage
- Water damage (contents)
- Legal liability
- Storm damage (building)
- Water damage (building)
- Theft (contents)
- Fusion (contents) – Provides cover if a motor in a household electrical machine or appliance needs to be repaired or replaced because the motor has burnt out by electric current at the property.
- Storm damage (contents)
- Impact damage (contents) – Provides cover if impact by motor vehicles or water craft, aircraft, space debris or satellites, falling trees or branches or TV antennae, satellite dishes or radio masts.
Source: Terri Scheer Insurance