Bad tenant behaviour behind dramatic rise in landlord insurance claims
Insurance provider RACV has issued a reminder to landlords in Victoria to ensure they vigorously screen prospective tenants after new data revealed that at least one Victorian property is maliciously damaged every day.
RACV General Manager Insurance, Paul Northey said there were a total of 2,575 landlord insurance claims during 2013-2014 - an increase of 10% compared to the previous financial year.
While storms accounted for the highest number of landlord insurance claims at 611 claims, a large proportion of the claims were attributed to tenant behaviour such as rental default (423 claims), malicious damage (396 claims) and leaving without notice (177 claims).
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Northey said that the data reinforced the need for landlords to protect their investment by having the right type of insurance policy in place and know what they are covered for.
“In addition to tenants causing damage, landlords should also consider the cost of natural disasters, such as storms, floods and fires and how a lack of adequate insurance cover could seriously impact their investment return,” he said.
While landlords insurance protects against damage caused by tenants, you may need to consider other levels of insurance, such as home and contents insurance or strata insurance if you are leasing out an apartment.
With increased levels of property investing, RACV recommends these tips for both current and future landlords:
Screen prospective tenants carefully including checking referees and past property managers.
If rent is paid late, take action immediately as missed payments can be just as costly as tenants who cause malicious damage
Ensure you have adequate landlord insurance to cover malicious damage and loss of rental income
Ensure your property is regularly inspected and conditions recorded
Consider getting a trusted real estate firm to manage your rental property