If you are in the property renting business, you require a specialized form of insurance. Without it, you will be taking some legal and financial risk associated with real-estate with your property.
Careless landlords have in the past suffered from bankruptcy due to the extra damage they encounter when things go wrong with their real-estate property. In Australia, your standard home insurance will not cover many needs that a landlord has.
Instead, getting landlord insurance will safeguard you in cases where a tenant tries to sue you or when you have any financial issues. If you are strictly renting your property, it means that you stop being a full-time resident. Therefore the homeowners cover will not do much in protecting your financial well-being.
When your tenant gets a severe injury while living in your property, they may sue you for the damages encountered. In this situation, your liability insurance or homeowners cover will cover for the damages. This is because settling such injuries is not inclusive in those covers especially if the tenant has lived there for an extended period.
If you probably own umbrella coverage, it may be as well as void if a tenant chooses to sue you. The umbrella coverage is reasonably cheap because it depends on the rest of your insurances to pay their maximum claims. In case a tenant sues, their lawyers may argue out that you were negligent in acquiring property coverage and your umbrella carrier may reject paying the claims.
Given an instance where your tenant has a pet which harms a child, not all renters will be able to pay the claims of an average dog bite. Without the right insurance, you will have a problem filing claims with your insurance carrier especially if they find out that you are renting the place.