An area of management that I feel gets very little attention from both agents and landlord is landlord protection insurance. Professionals Lithgow are not able to provide financial advice to our landlords. What I can tell you as your Lithgow Property Manager, is that you need to make sure that you have covered yourself with regard to having the right sort of insurance on your property.
Some things that you might want to ensure that you are looking at when you are purchasing your insurance could include the following items:
Low Excess – In the Lithgow area, the average rent is just under $300 per week. If you are purchasing an insurance policy that has an excess that you have to pay of $1000 or $1200, which are common excess amounts that we see, then your excess is close to, or may exceed your bond amount. This is a lot of money to be out of pocket for if something does go wrong. If the rental amount in Lithgow was more along the lines of Sydney or Melbourne rental prices, then this sort of excess would not be so crazy, but in Lithgow having an excess of these sorts of prices is much too high. Look for a policy that has $500 excess or below.
Pets – There are a number of insurance policies that I have seen pass over my desk throughout my years in Lithgow Property Management, that have excluded covering for pet damage. It is very important that you ensure that if you are allowing your tenant to have a pet, that you are covered for the rare occasion that there is damage to the property from a pet. Even if you have not allowed pets, you do not want an insurance policy that prohibits this, as there might be an occasion where you need to be covered.
Lease Terms – In NSW, a tenant does not have to sign a new fixed term lease. After they have been on an initial lease, the lease allows for a tenant to remain on a periodic or continuance lease. Professionals Lithgow Property Management have been made aware of a number of instances where an insurance company will only cover your lease if the tenant is on a fixed term tenancy agreement. Having a tenant on a permanent fixed term agreement is not required in NSW and a periodic or continuance lease is a perfectly legal document. If your insurance company is telling you that they will only cover you for a fixed term lease at all times, then you need to be looking for a company that will provide a better form of cover for you.
Contents Insurance – You should be looking for a landlord protection policy that also provides you with a basic contents insurance policy included in the insurance. If they are saying that you need to have a separate contents policy or that they will not cover you for contents, again, you should be looking for a better insurance policy than that.
If you would like some options for your Landlord protection insurance that covers off on the above recommendations, our office has forms from a number of companies that you can compare and make a decision based on your needs. Call the office on 63525125 for access to the documents.
LITHGOW PROPERTY MANAGEMENT, DONE PROPERLY
