Australia's Landlords Millions Of Dollars Out Of Pocket

Australia's Landlords Millions of Dollars Out of Pocket

17 November 2009

Australia's uninsured landlords could be collectively losing more than $70 million per year from their own pockets in loss of rental income, legal liability claims, and fixing damage to their investment properties caused by tenants.

Leading landlord insurance provider Terri Scheer Insurance said this was costing some landlords thousands of dollars when it could be avoided.

Landlord insurance covers landlords for the costs of repairing malicious or accidental damage to a rental property by tenants, legal liability and loss of rental income as a result of tenants who stop paying the rent.

"Many landlords think 'it will never happen to me', but unfortunately there are many instances where tenants damage property or abscond without paying their rent," Terri Scheer Insurance General Manager, Ms Carolyn Majda, said.

"Based on the amount that is paid to landlords for insurance claims and the proportion of landlords who don't have insurance, we estimate that uninsured landlords could be collectively paying more than $70 million each year from their own pockets.

"Landlords can avoid these out-of-pocket costs by having appropriate insurance in place."

Ms Majda said that in many instances, the price of landlord insurance was only a small fraction of the cost of some claims paid.

"Terri Scheer Insurance has paid claims of more than $40,000 to repair damage caused by tenants," she said.

"We have had malicious damage claims result from fire, broken windows, holes in walls and doors, and even graffiti.

"We also see lots of cases where good tenants with the best intentions have accidentally damaged a property or suffered financial difficulties that have impacted on their ability to pay the rent.

"Uninsured landlords really need to think about how they would manage financially if they were faced with thousands of dollars worth of damage to their rental property.

"They also need to consider whether they could keep up with their loan repayments if their tenants stopped paying rent.

"Many landlords are also unaware that they may be liable for costs relating to injuries that occur to tenants injured on their property.

"A standard house and contents insurance policy will not cover landlords in many situations.

"For a few hundred dollars each year, landlord insurance can protect you against these risks and provide some surety around your investment income."

Media contact: Corporate Conversation, 08 8224 3535

SOURCE: Terri Scheer Insurance