Floods a timely reminder for landlords and tenants
As New South Wales cleans up after the recent deluge of rain that caused widespread flooding, it’s a timely reminder for landlords about the importance of both insurance and preparation for natural disasters.
After all, an investment property is a financial asset as well as an ongoing income provider.
So, what should landlords be doing to protect their property against natural disasters?
Insurance, insurance, insurance
It doesn’t matter what type of investment property you have, it needs to be insured for events relevant to its location, such as flooding, fire, cyclones, storms and more.
And this insurance should be kept up-to-date and reviewed on a regular basis.
The recent floods in NSW are a timely reminder to check your landlord insurance policy and ensure it covers all the potential threats likely to impact your property.
As a tip, don’t forget to read the fine print of that policy. Sometimes there might be clauses that mean you’re not as protected as you need to be.
Meanwhile, the best landlord insurance policies will also protect you for a period should your tenant need to move out due to damage caused by a natural disaster.
This potentially means you will continue to receive rental income, even if your tenant needs to break the lease because the property is unlivable.
But what actually happens in the event a rental property is damaged due to natural disaster?
The post-disaster rental process
In the event of a natural disaster, property managers in the areas affected will often receive a huge volume of calls and reports from tenants whose residences may have been affected.
They will then inform you, the landlord, of the damage and its extent as quickly as possible.
Armed with that preliminary report of the damage, you should make contact with your insurer, flagging that a claim is likely to be forthcoming.
The landlord, the property manager, and the insurer will then remain in contact, working together to have the property assessed, and any required repairs made.
In the interim, if your tenant needs to move out as a result of damage, your property manager will work with you and the tenant to end the lease or alter it for the period when works will be undertaken.
A note for tenants
For tenants, it’s important to remember that while a landlord’s insurance covers the physical property, it does not extend to your personal contents within it.
That means you should have separate contents insurance to protect your own possessions against the threat of natural disaster. This includes all the items you have within that property that have value, such as clothing, furniture, electrical appliances, jewellery and more.
Sadly, too often tenants are caught out by the misconception a landlord’s building insurance covers their possessions. It doesn’t. Landlord insurance covers the physical asset of the property but not the personal contents within it.
How we can help
Our experienced property managers pride themselves on establishing great relationships with both tenants and landlords. We’re here for all parties in good times and bad, managing every property as if it were our own.