Why do I need landlord insurance if I have a rental bond?
Make no mistake about it Rental bonds are a great and reliable strategy for homeowners to protect themselves from financial losses. However, rental bonds are usually the equivalent of one or two months' rent. This amount may be sufficient to cover some of the following expenses:
- Free rent
- Damages caused to your tenants or their guests
- Cleaning costs
- Leaving the rental unit
- You face small losses because of your tenant.
As you can see, if you face significant or very expensive losses, the rental bond will be just a drop in the ocean.
For example, a tenant misjudges a turn and scratches some paint from your carport. The rental bond may pay for the repaint of the paint. However, if the tenant misjudges the turn and crashes into your car, damaging its contents, your repairs will cost more than your rental bond.
What are the biggest problems in being a landlord?
A coin always has two sides. Being a homeowner is a great source of income that most people can afford in their retirement years. In addition, being a landlord carries a number of responsibilities and risks that you may not realize:
- Irregular Tenants - Even if you try to screen your tenants thoroughly so that problems arise, the tenant is likely to get into trouble. These problems often come in the form of damage to your property. Other common tenant problems include low rent payments and complaints from other tenants.
- Failure to maintain your unit - Some tenants happily follow the rules and pay their rent on time but cause headaches for landlords by ignoring the rent space. In addition to cosmetic problems, lack of proper care often leads to structural problems as well as insect or other insect infections.
- Poor Property Manager - You may hire a property manager to look after the day-to-day running of your investment property. You will want to believe that life as a landlord has just become easier. Unfortunately, there are instances where a potential manager looks good in an interview but fails to take care of your property and enforce your laws.
What are the top insurance claims from owners?
While we see many claims from landlords, there are many that come up in large numbers. Here are the top five claims:
- Loss of rental income is more than half of all landlord claims.
- Deliberate and accidental losses are often the cause of a landlord's insurance claim. Depending on the nature of the damage, these claims can be quite costly.
- Tenant-related water loss is a common problem for landlords. Whether it's an unreported pipe, running a bath tub, or washing machine, make sure you know that your landlord's insurance policy is exempt from certain types of tenant-related water loss. Can
- Hurricane damage is a common reason for landowners to make insurance claims. True, these are more common in some areas than in others.
- The death of a tenant is a surprisingly regular reason why landlords lose out on rental income.
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Feel free to contact us at Grace Insurance if you have questions about landlord insurance or want to get a price. We are happy to meet your insurance needs.
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