Insuring your investment

Insuring your investment

Having acquired your investment property, the next important step is to ensure that it is adequately protected. Apart from insuring the building itself, investors in rental property should also consider whether contents cover is required. When planning to protect your investment there are two major considerations to take into account. First, is the type of insurance you need and second, the options you require.

The types of insurance most suitable for investors include Building Insurance, Contents Insurance and other options.

• Building Insurance
  As a property investor, this is the basic type of insurance you would need. It covers the building itself and is crucial if you're signing a contract of sale. It protects you against loss in the event of your building being damaged or destroyed, by fire for example. If this happened, your rental income would cease immediately and there may be nothing left of your investment except the land on which it once stood.
  
  With Suncorp Home Insurance you are covered for loss of rent for up to 12 months if your building is unfit to live in as a result of something covered by the insurance.
• Contents Insurance
  This covers only the contents - not the actual building. This type of cover is suitable for townhouse or unit investors, where the unit is let fully furnished, and the building itself is insured by the body corporate.
• Building and Contents Insurance
  This insures the building as well as the contents and is suitable for property investors who rent fully furnished homes or holiday homes. You can make a substantial saving by insuring your building and its contents together with Suncorp.
• Essential Cover
  Essential Cover will provide the cover you need for damage caused by basic events such as fire, storm, theft, burglary, etc. Essential Cover also includes $5 million legal liability cover.
• Options
  Building Replacement Cover: You can add this to your Building Cover at no extra cost. Basically, it means that you are insuring the building for enough to cover the cost of having it completely rebuilt if it is destroyed and is a particularly important cover for investment home buyers. Without Building Replacement Cover you may not receive sufficient money to fully repair or replace your investment property if it is destroyed.
  
  To be eligible for this cover, you must have your property insured for the right amount and the building must be in good condition.
• Investment Property Extension
  This provides basic cover for carpets and curtains in your investment property. Available as an extension to building cover, it has been designed for investors and landlords of unfurnished rental properties.
• Contents Fusion Cover
  You should add this option to your contents cover if you have a number of household electrical appliances in your rental property. It covers the burning out of electric motors in such appliances as fans and fridges, as well as the spoiling of food in fridges and freezers.