No landlord insurance? You’re renting at risk.
If you’re renting out a property without landlord insurance, you’re probably taking a big risk.
Woolworths landlord insurance is like a home insurance extension for landlords, to cover things that won’t be offered by home insurance alone.
What does landlord insurance do?
Woolworths landlord insurance adds a range of additional cover for events that are not necessarily covered by standard home and contents insurance.
It can be taken out as standalone landlord insurance, but by itself will not necessarily be effective cover. For example:
- Home insurance alone: May cover accidental damage by tenants, but not deliberate damage
- Landlord insurance alone: Covers malicious damage by tenants, but not accidental damage by tenants
What makes Woolworths landlord insurance different?
If you also have Woolworths building or contents insurance then naturally it might make sense to get your landlord insurance from the same place, for discounts of up to 15% on the combined policy.
Other than this, it’s very flexible and suitable for a wide range of needs, because you can get individual landlord contents cover, or building cover, or both, as needed.
- Landlord building insurance: Covers the building itself against tenant actions, and also offers a range of extra cover like rent default.
- Landlord contents insurance: Covers building contents that are provided for tenant use, and liability for unintentionally providing defective items.
It can also adapt to different circumstances.
For example, if you’re renting out an apartment in a building where the body corporate owns the actual building, then you won’t be able to get building insurance and might have trouble finding a policy that covers loss of rental income following damage.
In this case, your contents insurance can offer the same “loss of rent following damage” cover that landlord building insurance normally does.
What does landlord insurance cover?
The three main types of cover you’re looking at are probably:
- Insurance for damage and theft caused by tenants
- Insurance to cover loss of rent and legal expenses
- Insurance to cover liability
Insurance for damage caused by tenants
You can insure your building and contents against tenant damage. This policy covers malicious damage and theft by tenants for up to the lesser of either $35,000 or 20% of the applicable building or contents sum insured.
It does not cover damage resulting from poor tenant housekeeping, or the cost of cleaning, redecorating or wallpapering, unless it’s graffiti or has caused physical structural damage to the building.
Without landlord insurance, you’re typically not covered for theft or deliberate damage caused by someone who’s living at the insured address.
Insurance to cover loss of rent and legal expenses
You might lose rent if your tenant defaults, gets arrested, if the property burns down or in many other situations.
You can claim for loss of rent if your tenant does any one or more of the following:
- Leaves before the end of the agreed rental period without proper notice
- Leaves without paying their rent owed
- Does not pay rent and is legally evicted
- Is denied legal access to your building, for example because they were arrested
You are not covered if:
- The tenant’s rent was already in arrears when you took out the policy
- There’s no written lease or rental agreement that states the rental term, rent payable and bond amount.
- You did not act upon the tenant’s arrears in line with your state or territory laws, before their departure. For example, if you did not send them an arrears notice.
You can claim up to the lesser of either 10 weeks of rent, $20,000 or the actual amount of rent lost. The amount of rent lost is based on the weekly rent shown on the relevant rental agreement.
You can also claim up to $1,000 for legal expenses related to recovering unpaid rent, when pre-approved by Woolworths.
Loss of rental income following damage
You can also claim for loss of rental income if a property is rendered uninhabitable following an insured event. You’ll naturally have a much wider range of insured events with home insurance, as well as landlord insurance than landlord insurance alone.
In this case you can claim for up to the lesser of either 12 months of rent, 10% of your sum insured, or the actual rent you lose.
You cannot claim:
- Your building was not tenanted for more than 60 consecutive days immediately before the loss or damage
- If you did not have a contract in place for the property to be tenanted within the 30 days immediately following the loss or damage
- If your building is taking an unreasonably long time to be repaired or rebuilt
If you’re renting out a property owned by a strata title owner, and therefore can’t get landlord building insurance, this cover uses your landlord contents insurance sum insured instead.
Insurance to cover liability
If found negligent or responsible, you might be found legally liable for a tenant’s injury, illness, property damage or other loss. For example, if they trip on a mislaid carpet and break a bone.
As a landlord, your liability in relation to the building itself (such as a tenant falling down the stairs) might still be covered under Woolworths home insurance, rather than landlord insurance.
But your liability in relation to contents (such as defective kettle exploding) can be covered by landlord contents insurance.
Woolworths landlord insurance also offers:
- Outdoor items cover: Cover for contents that are kept outdoors, on pergolas, balconies, carports or anywhere on the property that isn’t enclosed by walls and a roof.
- Debris removal: The cost of removing debris and relevant council fees and architectural fees following an insured event
- Electrical motor burnout, as an optional extra: This is when the actual wiring of a domestic motor gets fried by an electrical current.
These are also available under home insurance, but having them covered by landlord insurance means you may claim these in a wider range of circumstances.
Exclusions and obligations
As a landlord, you are obligated to inform your insurer (in this case Woolworths) when the property occupancy type changes between a home you’re living in and a rental property you aren’t living in, or vice versa.
As a landlord, you will also need to complete a property inspection report:
- When you commence a new lease or rental agreement
- When an existing tenant vacates
- On annual basis for long term rentals
Did you know?
Special conditions for landlord contents insurance
There are also conditions around the exact types of contents that may be insured under landlord contents insurance. You can only cover:
- Contents that are provided specifically for the tenants use
- Are listed in the property inspection report that forms part of the lease
You cannot insure battery powered electronics like radios or laptops, building materials or items being stored on the site, rather than specifically provided for tenant use.
You can only insure contents that fall into one of the following groups:
- Furniture, furnishings and household goods
- Fixed carpets, carpet tiles, curtains, internal blinds, floor rugs under $500
- Portable household electrical items
- Free standing pools or spas that can be removed from the site
You’re also obligated to pay attention to building maintenance. This includes ensuring that the building is structurally sound, the gutters are free of debris, the floors are intact, all repairs are carried out by licensed tradespeople and similar.
Generally, you’re obligated to take good care of your property even while it’s being rented out.
Excesses and costs
The cost of your cover will depend on factors like the property’s value, the range of contents you’re insuring, your address and other factors.
It will also depend on your excess. This is the amount you will need to contribute to a claim. Woolworths landlord insurance lets you choose your own excess, although special excesses may apply to some claims.
- Malicious acts and theft by tenants: Your excess is the higher of either your chosen excess, or $500
- Rent default and legal expenses: These claims have a fixed excess of $400
Get a quote to find out how much it will cost you.
How to claim
The claiming procedure is generally the same as home insurance. Where applicable you’ll need to provide appropriate evidence of ownership and value, such as:
- Valuation certificates
- Card or bank statements
- Instruction manuals
Generally, you should contact Woolworths as soon as reasonably possible, on the 24 hour claims line, if you intend to make a claim.
If you’re making a claim for theft, vandalism or other criminal acts you should contact the police first and get a police report.