Don’t set and forget – always ensure your insurance is up to date. When buying a property it’s important to ensure your asset is insured against any unforeseen events. It’s likely to be the most expensive asset you buy.
We’ve noticed overtime investors review their property portfolio performance but neglect to review their insurance.
Insurance cover provides a vast range of unforeseen issues. These include external & internal damages, loss of rent, malicious damages, structural problems and also personal contents to name a few.
Two of the most common insurance policies investors often neglect to review are landlord cover and building cover.
Landlord cover
Landlord insurance cover provides protection around many problems including damages and loss of rent. Click the hyperlink to learn more about the importance of landlord insurance cover.
Building cover
Building insurance is something often overlooked. Many do not take into account the fact that the property has increased in value and the cost to rebuild the property is higher than when they first insured. If you’ve renovated or implemented capital improvements, you should also take these into account.
To ensure you are not left out-of-pocket, make sure you have sufficient cover to fund the replacement of damages or the entire dwelling. The insured amount should take into account the rebuild costs to get the property to its previous condition. This means don’t just insure the property at market value. With the general effects of inflation, the cost of materials and labour will naturally increase. This eventually means you will need to consider increasing your cover from time to time.
Don’t set and forget – always ensure your insurance is up to date
There are different insurance policies to suit various property types, locations and even how its leased. Investing in property can be a rewarding experience. However, if not adequately insured, you can be left financially worse. Take the time to review your investment strategy regularly and seek advice where needed. Another good market insight you may enjoy reading is ‘The power of an annual financial review‘ that elaborates on the importance to understanding your cash flow.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
April 2020
