Ever wondered what the difference is between Building Insurance and other types of property insurances? We explain.
The importance of Building & Contents Insurance for your investment property
If this past year has taught us anything, it’s that life is full of surprises, and while some surprises are good, there are certain surprises which are unwanted, unexpected and sometimes, expensive. This is where insurance comes in.
Insurance may provide a safety net for you personally if something unexpected happens with your investment property. It also gives you more options to replace, repair or be compensated for your property or belongings if something does go wrong.
The world of insurance can be complicated and confusing, however it’s vital property owners and landlords take the time to understand the difference between the various insurances out there – specifically when it could save a lot of headaches down the track.
As a broad recommendation, we suggest all our landlords take out Building, Contents, Public Liability and Landlord Insurance.
What is building insurance?
Building Insurance covers the cost of repairing damage to the structure of your property and usually covers public liability and loss or damage caused by:
Items generally covered on this type of policy include:
- In-ground swimming pools
- Rainwater tanks
- Solar panels
- Hot water systems
- Built in cabinetry
Please ensure you carefully read each policy when comparing insurances, as different policies will cover different items.
What is public liability insurance?
Public liability covers people at your home. Legal liability is designed to cover bodily injuries and deaths that may occur at your home, to people who don’t usually reside there.
It can also cover damage to other people’s property due to an incident that occurs at your home. If the liability does fall on you, the costs can add up to big bucks. This is when having insurance coverage can really help.
What is contents insurance?
Even if you’re not providing a furnished property, contents insurance covers items that are not viewed as part of the structure of the property, such as:
- Internal blinds
- Loose floor coverings
- Light fittings which are not permanently fixed to the buildings
- Household goods (electrical appliances such as dishwashers)
What insurances do I need for my investment property?
It’s important to remember that an investment property is a big asset – you earn an income from it and you will want to minimise any losses as much as possible. Having Building, Contents and Landlord Insurance will provide peace of mind and in the event that something does happen, your investment can get back on track quicker.
Most insurers will usually have a policy that combines all three insurances in one (contents, public liability and building insurance), however we recommend you do your own research to find the best policy for you.