Isn’t it so exciting to buy your first home? Or finally be in a position to purchase an investment property? That is real adulting right there, and it is so gratifying.
And while shouting from the rooftops about achieving your life goals is entirely reasonable, one thing you really do need to factor in, as part of this adulting business, is insurance.
The last few years have certainly proven that life can be unpredictable. Without the right insurance, these unexpected events can not only be stressful, but expensive.
Your home is probably the most significant investments you will make. Whether you’re a live-in owner or an investor, it’s something you need to be proactive in looking after to ensure you are protecting your future financial security.
Selecting the right type of insurance for your circ*mstances is crucial.
What is home insurance?
Home insurance, sometimes called building or property insurance, protects your property from loss or damage due to unexpected events. As well as your home, it also covers carports, garages, fences and any fixtures permanently attached to the house like carpet, doorknobs and drawer handles.
The unexpected events a home insurance policy covers will differ from policy to policy, and not all policies will include things like floods or fires. On the flip side, you may not want to bother paying for a policy that includes cyclone insurance if that’s not a risk factor where your property is located.
What is contents insurance?
Contents insurance covers any of your possessions that are stored at the address of the insured property. This includes things like furniture, electronics and anything else not attached to your home.
Home insurance and contents insurance are often packaged together and, very creatively, called ‘home and contents insurance’.
Obviously, as a homeowner it’s a good idea to have your property insured. And if you are a live-in owner it’s a great idea to have home and contents insurance. However, standard home and contents insurance won’t cover you if you plan on renting out your property. This is where landlord insurance becomes important.
What is landlord insurance?
Landlord insurance is a special type of insurance designed to protect landlords from the risks involved with having a tenant. As well as damage caused by tenants, landlord insurance can also insulate you from losing rent if your tenants abandon your property or default on their payments. Obviously, the extent of what landlord insurance covers will vary depending on your chosen policy.
At Independent, we suggest discussing your landlord insurance options with your property manager, as they are able toprovide advice about your specific needs.
Really, landlord insurance is about providing you with stability, giving you assurance that the income stream you gain from your investment property is protected from circ*mstances outside of your control.
What is renter’s insurance?
A responsible tenant will take out their own contents insurance, as the landlord insurance policies won’t cover them in a situation where their belongings are lost or damaged. On the flip side, a tenant’s insurance policy will not cover the landlord’s property, so it’s important that each party cover themselves with their own policies.?
Side by side: Landlord insurance vs home insurance vs contents insurance
Choosing the right combination of insurance is an important part of protecting your investment.
