Everything a landlord needs to know about insurance
The need for insurance is part of life and all the policies that you take out - be they medical aid and retirement annuities to car insurance and life insurance - are designed to protect you in some way from unforeseen circumstances. When it comes to your property, you cannot neglect the need for insurance. M Worx Property Partners explain the difference between building insurance and home contents insurance - and we introduce our own tailored insurance policies that provide a safety net for landlords.
Building insurance
Building insurance is also sometimes referred to as homeowner's insurance. It covers the structure of your home and provides protection if your home is damaged by fire, flood, a burst pipe or some other unforeseen circumstance. Depending on how your specific policy is worded, it may also provide cover for assets like swimming pools, fixed generators and water tanks.
As a homeowner, you need to be aware that building insurance only covers you for specific incidents - it does not cover general maintenance or natural wear and tear.
If you're planning to buy a property, the bank may require you to take out building insurance to protect the asset. However, if you are buying into a complex or a block of flats, building insurance may well be taken out by the body corporate for the entire building. It is always the responsibility of the landlord - and not the tenant - to ensure that building insurance is in place.
Household contents insurance
A household contents insurance policy doesn't protect the structure of your home, but it protects all your possessions that are inside your home. A burglary, fire or flooding incident can leave you with the enormous expense of having to replace household appliances, furniture, personal effects and more. In the case of a rented property, it is the responsibility of the tenant - and not the landlord - to take out a household contents insurance policy. Depending on the value of your household goods, this insurance policy can cost as little as a couple of hundred rand every month - and can save you hundreds of thousands in the event of a fire, flood, burglary or other disaster.
Eviction insurance
Tenants' rights are greater and stronger in the eyes of the law than ever before and it is important for you, as a landlord, to protect yourself and your asset. Despite doing the appropriate credit checks before a tenant moves in, it is still possible to find yourself in a situation where your tenant is in breach of contract and is refusing to cooperate or move out.
When you lease out your property with M Worx Property Partners, you get the option of taking out Eviction Cover or, for complete peace of mind, Eviction Cover and Rental Guarantee.
With Eviction Cover in place, you will be protected from paying exorbitant fees to evict a non-paying tenant. If your tenant does not respond to our letter of demand, we will follow the legal route on your behalf and make sure that the eviction is carried out. Your policy will cover you for attorney, advocate and sheriff fees up to a maximum of R120 000.
With Eviction Cover and Rental Guarantee in place, you will also be protected against rental losses. Your policy will cover you for 50% of your rental loss in the first month and 100% of your rental loss for up to another five months while the eviction process runs its course.
As a homeowner and a landlord, protecting your asset is one of your top priorities. By ensuring that you have the appropriate insurance policies in place, you can rest assured that your asset will continue to pay dividends. For more information about Eviction Cover and Rental Guarantees, contact M Worx Property Partners today.
