Unfurnished, partially-furnished, fully-furnished – the way you rent your investment property makes a difference to the kind of insurance you need.
There are numerous reasons why you may choose to lease your investment property completely furnished – market expectations, you bought a furnished apartment, or maybe you are renting out your home temporarily while you live elsewhere. If any of this sounds like you, you need to be aware that you may need extra cover for a fully-furnished rental.
Why? Contents are contents, right?
Well, no. Not when it comes to insurance. The contents policy you might take out for your own home, which is usually bundled as ‘home and contents’, will likely define contents differently to how it is in a landlord insurance policy. Your own home contents cover probably includes all your personal possessions – from whitegoods and furniture, down to your undies and toothbrush.
This isn’t the case with landlords’ contents cover. Although what is considered contents varies between insurers, when landlord insurance providers talk about contents, they are usually referring to fixed/permanent/unmoveable items only. That means fittings and fixtures like:
- curtains, blinds, drapes,
- carpets, floor tiles, lino and other floor coverings (except loose rugs),
- fixed appliances (like ovens, non-portable stoves or built-in aircons/heaters),
- built-in furniture,
- non-portable electrical equipment,
- water heaters and coolers, and
- light fittings.
For properties in strata complexes, contents also refer to internal paintwork, wallpaper and any fixture or structure improvement that the body corporate is not required by law to insure.
What landlord contents cover does not usually include is furniture or non-fixed appliances such as sofas or TVs. And it does not cover any contents owned by a tenant – they need their own renter’s insurance like TenantCover to protect their personal possessions.
NOTE: At EBM RentCover, landlord contents also includes those items owned by the landlord which are stored at the premises but are not for use by the tenants and must be secured and inaccessible to the tenants.
So, if your rental is fully-furnished – that is, it includes furniture and appliances for your tenants to use, like beds, tables and chairs, sofas, fridge, washing machine, TV – you need additional contents cover. This is known as insurance for non-fixed items.
When arranging an insurance policy for your investment property, it is important to select cover that suits how you will be leasing the home, whether a house or unit – that is fully-furnished or unfurnished. Be sure to let the insurance provider know the home is fully-furnished, so you can insure non-fixed items. Remember, if you don’t specify cover for non-fixed items, your contents policy will usually only cover fittings and fixtures. If you are providing a fully-furnished property be sure to take an inventory of all the furniture and appliances that you are including for tenant use – you’ll need to list these on the property inventory/condition report. You should base the contents sum insured on the cost to replace those items.
TIP: If you are renting your property through the short-stay accommodation market (including Airbnb) and provide everything a guest/tenant needs for their stay, such as linen and crockery, entertainment systems, soft furnishings like cushions and blankets, sporting equipment, books and magazines, you need an insurance policy that covers those household goods in addition to protecting fittings and fixtures and non-fixed items like furniture and appliances. The RentCover ShortTerm policy may suit the needs of the property.
If you don’t want to run the risk of being caught short should things go wrong, be sure to take out a policy that covers the contents items you are including for your tenant’s domestic use – whether it’s a fully-furnished property or a holiday home with all the bells and whistles.
For more information about landlord insurance, contact the EBM RentCover team on 1800 661 662 or send any questions to firstname.lastname@example.org.
*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 need us we are there, contact 1800 661 662 if you have any questions.