Case Studies: Landlord Insurance

For some investors, landlord insurance may seem like an unnecessary additional cost however, as these case studies show, protecting your important financial is vital.

As our Taylors Insight: Why You Need Landlord Insurance For Your Investment Property explains, damage and circumstances out of your control can cost thousands in repairs or lost rental income. 

The following two case studies exemplify the importance of making sure you have an insurance policy in place to protect you and your investment property against the unexpected. 

Case Study 1

In one of the apartments managed by Client Relationship Specialist, Jody O’Brien, there was major water damage. A pipe had burst in the concrete slab plus water from leaking taps inside the wall in the unit above was also seeping through. Consequently, the kitchen was flooded with water running out into the hallway. The kitchen cabinetry, bench, flooring and ceiling was damaged beyond repair and needed replacing, as did the hall carpet in affected areas and bedroom carpet. 

Additionally, a claim was placed by Jody on behalf of the tenant for a compensation of loss for lack of facilities during the 9 month period until the repairs were completed. 

Jody’s proactiveness around the management of the repairs and insurance claim for the landlord and tenant was not only a key factor in a successful outcome for both parties but demonstrated the importance of Taylor’s value to take control  and making things happen, rather than just adjusting to a situation or waiting for something to happen.

By having landlord insurance for the investment property and a proactive Client Relationship Specialist, the landlord was reimbursed the total cost of approximately $3,900 for damage repairs and the tenant was awarded over $11,000 in compensation. 

Without landlord insurance, this would have been a very expensive water issue for the landlord. In contrast, by taking a landlord insurance policy through our recommended insurance broker, Watkins Taylor Stone, the combined premium and excess of less than one week’s rent was minimal.

Case Study 2

During a routine inspection undertaken 3 months after new tenants had moved into an apartment in Sydney’s Eastern Suburbs, we discovered the tenants had installed a jacuzzi and cabana on the apartment’s exclusive rooftop balcony. Not only was the structure illegal but had it blown off during the storms that ensued shortly after its installation, there could have been potential public liability issues for the landlord as strata corporation insurance is likely to cover common areas but not areas exclusive to the apartment itself.

Taylors immediately arranged for removal of the structure and served a termination notice to the tenants. The tenants ceased paying rent and by the time they were removed from the apartment, the costs to the owner were $12,000 for the removal of the structure and other damages to the apartment plus $8,000 in loss of rent. Although strongly recommended by Taylors, the landlord had elected not to take landlord insurance. For a premium and excess of less than one week’s rent, the $20,000 that we could have claimed on the landlord’s behalf was now a costly expense.

However, at Taylors, we are committed to helping our clients and going above and beyond to make a positive difference. Through an active marketing campaign and management of the tenant application process, the Taylors team was able to lease the property for a higher rent within two weeks after possession. An application to the Tribunal also led to successfully claiming the bond which covered half of the lost rent. 

Since then our Principal, Mark Taylor, attended the Local Court to gain garnishee orders on both tenants to recover the remaining $16,000. Through his determination to reach a positive outcome and his representation of the landlord at Waverley Court, Mark secured set payments from the tenants over a period of 12 months until the amount is paid in full. 

This case study is a prime example of how vitally importance it is to protect your investment property with landlord insurance.  If landlord insurance taken out through a reputable insurance broker like Watkins Taylor Stone, the full amount would have been received within 30 days and the insurance company would have taken the responsibility to recover funds from the tenants.

Like To Learn More?

For more information on landlord insurance we recommend to read how Watkins Taylor Stone can assist or contact our team of specialists today.