Your role is not one of insurance advisor and you may not provide insurance advice unless you have authorisation by an Australian Financial Services License (AFSL) holder to provide advice on regulated Insurance products.
However, once your client decides to buy property, you must ensure that they are referred to the correct advisors to obtain all necessary insurance. You must also ensure that they have in place the right level of general insurance.
In Module Six we will look at regulated insurance products such as Life and Trauma Insurance. Following are some recommended general insurance products, which your client will need.
House and Contents
Home buildings insurance – is insurance for the buildings at a site used for domestic and residential purposes.
Home contents insurance – is insurance for certain items used primarily for domestic purposes.
Where the owner’s corporation covers insurance for the building, your client may still need gap insurance, as the building insurance may not cover some items such as carpets and blinds.
Landlord protection insurance covers some particular risks associated with renting out a property that may not be covered by a typical home and contents or strata title insurance policy.
Common features of a landlord insurance policy include:
- Malicious or intentional damage to the property by the tenant or their guests
- Theft by the tenant or their guests
- Loss of rent if the tenant defaults on their payments
- Liability, including for a claim against you by the tenant, and
- Legal expenses incurred in taking action against a tenant.
It’s important to remember that not all landlord protection policies are the same. Some, for instance, are designed to be taken out in addition to a typical home and contents or strata title policy, while others are more comprehensive.
Some policies allow cover for the contents of the property. This is particularly important if a property is partially or fully furnished.