The Importance of Insurance for an Investment Property!

As a real estate agency, we cannot stress the importance of taking out appropriate insurance to protect your most valuable assets.Insurance can protect you against: mother nature and all her fury (fire, flood, sharks with laser beams attached their heads etc), property damage or non-payment from negligent tenants, and even civil unrest if Krispy Crème ever runs out of doughnuts and the streets are full of rioters. Insurance can generally be split into three categories for property….

Building Insurance

First and foremost, the most common insurance spoken about in our agency is building insurance.

This insurance protects the structure of the building against accidental damages.

It protects:

  • The walls
  • The windows
  • The ceiling
  • And more!

If a truck crashes through your property (it happens) you’re covered, if a vandal smashes a window with a brick you’re covered and if the ceiling spontaneously collapses, guess what? You’re covered!

Contents Insurance

A lot of emphasis is placed upon building insurance, but many landlords can completely forget or disregard contents insurance.

A common misconception is that contents insurance covers only furniture, the couch or the bed that can be replaced.

However, contents insurance typically covers items within the building such as light fittings, the oven, curtains, hot water systems, and much more.

Obtaining contents insurance can be as essential as building insurance.

Landlord Protection Insurance

You have a tenant on a fixed term lease. His name is Freddie.

Freddie has a midlife crisis, in his twenties, packs up his suitcase, changes his identity and takes the first flight to Columbia; where he becomes a drug ring leader and lives the rest of his life in luxury.

While we admire Freddie for chasing his dreams, this puts you, the landlord, out.

Despite a fixed-term lease with months ahead of it, and no tenant to pay the rent- the mortgage remains and someone has to pay it.

Taking out landlord protection insurance can entitle you to rent monies in the event your tenant doesn’t or cannot pay.


It is good to note that owning multiple properties whilst utilising the same insurance companies, can open up a broker to haggling.

So, don’t hesitate to haggle!

How Do I Know What Insurance Company to Choose?

Speak to your property manager about being referred to reputable insurance brokers.

Property managers often handle insurance for numerous landlords and are aware of the best value and most efficient insurance brokers.

Follow: Subscribe to this post's comments

Leave a Reply