Landlord and Building v Tenant Insurance
The balmy Spring breeze plays with my hair as I take a long sip from my too-hot coffee mug, lightly burning my lip. Talk of unknown viruses from the television fill my living space on a forgotten Sunday afternoon. I welcome the aromatic scents of Spring, coffee beans and the tangy stir fry I’ve left simmering on the stove, and a hint of something else… something mildly bitter. The smell invades my nose as I try to place it.
I painfully stub my toe as I dash around the deep brown leather sofa. I make it to the kitchen, just in time to watch helplessly in horror, as flames come to life from the stove top and begin their steady ascent of destruction.
I bet you’re thinking oh, I hope they have insurance. Unfortunately, like many renting Australians, they didn’t know the difference between landlord/building and tenant insurance, and their coverage. They believed that the landlord and building insurance would cover their personal belongings – let’s just say, they’re going to have a very hard time replacing that expensive leather couch.
Landlord and Building insurance is designed to cover the cost of replacement or repair needed when certain events occur that damage a residential investment property – Allianz (allianz.com.au). This will usually cover:
- Legal liability for compensation required in circumstances of death, injury, illness and damage to other people’s property that occurs as a result of an accident at a residential investment property.
- Protects against damage to the property, and theft by tenants and other people.
- Potential financial losses like rent default (tenant stops paying rent) and loss of rent (an event has occurred at the property, and it is no longer inhabitable).
- Cost to rebuild if the property is destroyed or damaged.
- Replacing locks under the suspicion of theft.
- Damage and destruction to landlord contents (fixtures, fittings, appliances and provided furniture) at a residential investment property.
Tenant insurance is also known as renters or contents insurance. It’s designed to help cover the cost of loss or damage to the contents at your rental home as a result of an insured event – Allianz (allianz.com.au). Personal belongings at the property will be covered under tenant contents insurance. From larger items such as furniture to smaller but still valuable items such as jewellery. This will usually cover:
- Legal liability for compensation of accidental injury to someone while at the rental property, and damage to other people’s (landlord) property.
- Temporary accommodation costs if the property becomes uninhabitable due to an insured event.
- Financial loss due to fires, theft/break-ins, impact damage, water/oil leaks, explosions and natural events (bushfires/storms).
- Emergency contents storage in circumstances where the property becomes uninhabitable.
- Removal of damaged and destroyed property.
- Replacement of perishable food and medicine due to events like fridge/freezer breakdown.
- Some insurers may include veterinary costs if injury to pets is a result of an event occurring at the rental property.
- Replacing locks due to break in and suspicion of stolen keys.
By now, you should have a better understanding of the differences between landlord/building and tenant insurance, and what is covered by both. So, if you want to avoid being like the unlucky tenant at the beginning of this article – I’d suggest revising your insurance and assessing what is covered. Although, I hope that such unfortunate events do not arise; it is better to be safe than sorry.