The fine print: What to know about Terri Scheer landlord and building cover.
Terri Scheer is a specialist insurer for rental and investment properties. Compared to typical home insurance policies, even those with landlord cover, Terri Scheer Landlord and Building Insurance policies offers a significantly wider range of protection, especially for unpaid rent and damage caused by tenants.
If you’re renting out property in Australia, either as an investment or for a living, you may want to compare Terri Scheer landlord insurance alongside other options.
What cover options do I have?
The two cover types available are:
- Landlord Insurance. General protection to cover furnishings, tenant default or unpaid rent for other reasons, and a range of miscellaneous events. Also insures the building against damage caused by tenants.
- Building Insurance: Insurance to cover damage to the structure and fixtures, as well as subsequent loss of rental income, resulting from weather events and other hazards.
You can take out just one or the either, or you can combine both for a 10% discount off premiums. Here’s some more information about those categories of insurance, to help you decide what you need.
What does Terri Scheer's Landlord Insurance cover?
Terri Scheer's Landlord Insurance covers you for tenant-related risks like loss of rental income and damage to your property by tenants.
Terri Scheer offers two different types of landlord cover:
- Long stay rental cover. Designed for properties being used as extended rentals. Available for self-managed properties, as well as landlords who use a property manager.
- Short stay rental cover: Designed for short-stay properties such as holiday home rentals. Only available for landlords who use property managers.
Each type of Terri Scheer Landlord Insurance policy covers similar situations, but the payouts and insured events vary, with regard to:
- Loss of rent
- Building and contents
- Legal liability and tax audit
Let’s briefly review each of these.
Loss of rent
This covers your lost earnings when a tenant doesn’t pay rent, whether it’s because they won’t or they can’t.
Insured events include:
- Tenants not paying rent. Whether it’s because they absconded, were evicted with outstanding rent, got a court-ordered hardship exemption or passed away, Landlord Insurance can help cover loss of income from unpaid rent. For short-stays, this generally only covers lost rent in the event of tenant’s death.
- Untenantable properties. If a property cannot be rented out following an insured event, cannot be accessed because of damage to a nearby property, or if a previous tenant refuses to vacate, you can get covered for lost earnings.
If you are managing your own property, Terri Scheer Landlord Insurance can also help cover approved legal expenses incurred while trying to claim rent owed.
Building and contents
This section of the policy can insure your building and contents against damage caused by tenants or their guests. It also insures you against environmental damage, for example from fire and earthquake, but for contents only, not the building itself. You will still need to consider the separate Building Insurance policy for
It also insures you against environmental damage, for example from fire and earthquake, but for contents only, not the building itself. You will still need to consider the separate Building Insurance policy for more complete cover.
Contents specifically refers to:
- Portable household goods and appliances, like kitchenware or whitegoods
- Furniture and furnishings
- Curtains, blinds, carpets and floor rugs, except rugs that are permanent
- Floating timber floorboards, that are not affixed to a sub-floor
- Above ground pools
- Manchester and linens (only if you are managing your own property)
If the insured contents are damaged by an insured event, landlord insurance can cover the cost of damage.
Legal liability and tax audit
You are covered for up to $20 million of legal liability costs if you, as either the landlord or property owner, are legally liable for someone’s death, injury or property damage. This includes legal expenses, or amounts recoverable from you.
A range of specific conditions apply, for example if you are held liable for a tenant’s illness as a result of asbestos on the property.
You can get covered for professional expenses incurred in responding to a tax audit of the insured property. This specifically refers to audits carried out in relation to the lodgement of a tax return.
What are the insured events?
- Accidental damage and pet damage
- Deliberate damage or theft caused by tenants, their guests or unknown persons
- Flood, rainwater, storm and lightning
- Fire, explosion or scorching
- Electric motor burnout
Under the Landlord Insurance policy, the building itself is also insured against accidental damage, pet damage, theft and deliberate damage caused by tenants or their guests.
There is no cover under this policy for damage resulting from tidal wave or tsunami, and contents kept in the open air are not insured for damage caused by storm or rainwater.
Which contents are not insured?
- Manchester and linen - if you have a property manager
- Cutlery and crockery
- Electronic data
- Tools of trade or commercial stock
- Pets or other animals
- Most landscaping, such as lawns, gravel or any plants except potted plants
- Clothing or jewellery
- Antiques, except furniture
- Sporting goods
- Documents of any kind
- Artworks valued at more than $1,000 each
- Hand woven rugs or carpets
- Vehicles of any kind, including watercraft or bicycles
How much is paid out for a contents claim?
When reimbursed, you may be paid the value, or cost of repairs, minus the applicable excess and relevant bond amount.
What does Terri Scheer's Building Insurance cover?
Terri Scheer Building Insurance is a lot like standard home insurance, except it can also pay for the resulting loss of rent after insured events.
There are three parts to the Building Insurance:
- Damage cover. Following an insured event, this pays out to cover the damage or loss, up to the sum insured.
- Loss of rent: Following an insured event, pays out to help cover loss of earnings from the property being untenantable.
- Legal liability: The same type of liability cover as you can get with the Landlord Insurance, with up to $20 million for your legal liability as the property owner or landlord.
What events am I covered for?
Insured events under your Building Insurance include:
- Accidental loss or damage
- Fire or explosion
- Storm or lightning
- Malicious damage, theft or vandalism
- Escape of liquid
How you’re covered for loss of rent
If a building is untenantable for a period of at least 7 days after one of the following events, you may claim for lost rent.
- Malicious damage by unknown persons
- Fire or explosion
- Riot or civil commotion
- Water or oil leakage
- Storm or rainwater
- Accidental glass breakage or electric motor burnout
The conditions are slightly different depending on whether it’s a permanent tenancy or a holiday rental property.
- Permanent residency. Up to 52 weeks worth of lost rent until the property becomes tenantable, a new tenancy commences, or the policy limit is reached, whichever comes first. The amount paid is determined by the lesser of either the current tenant’s weekly rent or the weekly rent sum insured, multiplied by the relevant number of weeks.
- Holiday rental. Up to 52 weeks worth of lost rent, to a maximum of $50,000 per period of insurance, until the property becomes tenantable, a new booking commences or the limit is reached, whichever comes first. The amount paid is determined by the value of unpaid or returned rent or deposits, or the relevant shortfall compared to the previous year.
What kind of exclusions are there?
The exact conditions and exclusions vary between building and landlord insurance, between different types of rental property and for certain claims.
- You should take all appropriate steps to prevent further damage or loss, and to restore your property to a tenantable state as soon as possible.
- You should keep Terri Scheer informed of any relevant situations, and let it examine or access insured property as needed.
- Some types of cover are only available to you in your capacity as a landlord. For example, there is no cover for theft caused by non-paying guests and your policy may not be active if you are residing in the property, or it is vacant and you are not looking for tenants.
- Waiting periods may apply. For example, you may not be able to claim for a tenant default if you took out the policy after that tenant was already in arrears.
- You will need to use up the entirety of the bond, where applicable, before you can claim on insurance.
General exclusions also apply. Usually, there is no cover for:
- Acts of war
- Actions or movement of the sea
- Erosion, subsidence, landslide or mudslide, except as the result of another insured event such as a storm or flood
- Loss or damage resulting from your tenant’s poor housekeeping, except as explicitly covered by the policy
- Rust, mold, mildew, wear and tear and similar deterioration unless it’s caused by an insured event
- Damage resulting from tree roots
- Reptiles, under pet damage cover
- The tenant using the premises for trade, manufacturing or childcare with your knowledge, or you using the premises for any business, other than in your capacity as the landlord
What's the excess like?
The excess payable may vary depending on the claim, the type of policy, your location and the standard excess chosen by you.
Where you are able to choose your own excess, you may select a higher amount for lower premiums, or a lower amount for higher premiums.
Terri Scheer reserves the right to raise the excess in certain situations, such as based on your claims history, location or in other unusual circumstances.
Short stay and managed Landlord Insurance excess
- Loss of rent, tax audit, lock replacement, removal of goods and representation costs: $0
- Malicious and accidental damage, and scorching: $250 excess ($500 in NT)
- Earthquake: $200
- All other claims: $100
Self-managed property Landlord Insurance excess
- Loss of rent: 1 week’s worth of rent
- Malicious and accidental damage, and scorching: Your choice of either $250 or $500
- Earthquake: $200
- Replacement of locks, bailiff fees, removal of goods, liability and tax audit: $0
- All other claims: $100
- Malicious and accidental damage: Your choice of $250, $500 or $1,000
- Earthquake: $250
- Loss of rent, liability and certain other benefits: $0
- All other claims: Your choice of $250, $500 or $1,000
How do I make a claim?
In the event of a claim, you should contact Terri Scheer as soon as you are reasonably able. For certain claims, such as theft of property worth more than $10,000, you will need to have additional information, including a police reference number, before you can lodge a claim.
You will generally need to provide evidence of loss, such as proof of how much rent a tenant pays, or evidence of damage.