Hello. I have just bought my first IP. Now I need to arrange insurance. 1. Should I get home/building insurance or landlord insurance?...If it is an IP am I forced to get landlord insurance? 2. If you choose good tenants then the risk is lower and therefore the rental insurance seems unnecessary...what do you think? (Then building/home insurance would only be bought) 3. Which company/s are recommended? Thank you.
ALWAYS have landlord insurance There is no such thing as low risk. Good Tenants default due to health, divorce and job loss. Go with Terri Scheer, property insurance plus or ebm.
Xenia is right, unless you have a crystal ball get insurance. You never know what is around the cover for your tenants and will help you keep protected. it is bad enough having a vacant property in between normal tenancies but if you are planning on investing over a number of years there is a good chance you will need to make a claim at some point somewhere down the road, especially if you go on to own multiple properties later on. If you factor it into your cost and view it as when you make a claim rather than if you make a claim you will be better prepared for what this investing game dishes out to you. My personal properties are with Terry Scheer, but all the above recommendations have really good reputations for the most part
LL policy costs less than a weeks rent per year. Can't afford not to have it IMO. Ensure you have building cover as well. You might get by without this if its a strata property but check what their policy says first. I like having the building policy with the same place as the LL policy that way they can't defer responsibility to each other and can do claims in 1 process. Contents cover is the tenants responsibility.
I have the LL insurance on my two IPs with AAMI. I've made several claims on my LL insurance and I have to admit that my experience with AAMI's service and claims process is that it is very quick and easy. Never had any problem with them paying my claims or trying to screw down the payment amounts. My accountant tells me that based on what some of his other clients are paying for LL insurance AAMI is not on the cheapest. But my experience with insurance companies is that cheap premiums usually (not always) equals a narrow scope of coverage and a hassle getting them to pay.
