QUESTION: I insure my investment unit with a landlords insurance policy covering contents damage, personal liability and loss of rent. The contents have been ‘written down’ to an amount  where there is not much considered risk.

I don’t think rent non-payment is likely and the cost of insurance has risen to over $400 a year.  I wonder if it’s worth it. – Owner, Centennial Park

ANSWER: With landlord’s insurance you are paying for peace of mind and maybe you already have that with your current tenant – although the unexpected can always happen through no fault of either party.

Last weekend’s Sun-Herald had a story about a landlord who thought she had insurance but didn’t.  Meantime her tenant defaulted on his rent and trashed her apartment.  As a result she missed the opportunity to sell before the market dropped.

Another article from last year (that you can access on the Herald website) stated that most claims are for loss of rent but cited unexpected events – like the tenant’s sudden death – where insurance kicked in.

And don’t forget Murphy’s Law – as soon as  you cancel your cover, disaster will strike.

Go to flatchat.com.au/forum for the link to the other stories, to join the discussion and ask your own question.