Who insures a property, when?

The recent flooding crisis in both southeast Queensland and New South Wales highlights the importance of adequate property insurance for rental occupiers, owners and also buyers and sellers.

But it also begs the question who insures what and when should it occur?

Here’s a brief recap of what needs to occur when it comes to property insurance…

Insuring a rental property

In terms of rental properties, both the owner and the occupier should take out their own insurance in the knowledge each policy will cover slightly different things.

Rental owners

Rental owners require landlord insurance which should cover damage to the building, injury to people attending the premises and may also potentially cover lost rental income should the property prove uninhabitable or be in need of repair.

It’s important to note, this insurance does not cover the personal effects belonging to the rental occupier residing at that property. And this is where rental occupiers need to be mindful.

Rental occupiers

If you are renting a property, you need to take out your own contents insurance in order for your personal effects to be insured in the event of a natural disaster, a fire or even theft.

Buyers and sellers

The laws of each state and territory can vary when it comes to who is responsible for insuring a property that is currently under contract.

And this is something that buyers and sellers should appreciate and familiarise themselves with. For example, in most states, the insurance for the property remains the responsibility of the seller until the date of settlement.

But for buyers in Queensland that’s not the case. As the Real Estate Institute of Queensland explains, a property purchaser should take out insurance for the property they intend to buy by 5pm the day after that property goes under contract.

Our best advice here is to look up the legislation that applies to your state or territory, talk to your conveyancer about your obligations and reach out to your preferred insurer to make sure the property you are buying or selling remains covered throughout the sale process in the event of a natural disaster.

A quick disclaimer

Property insurance will vary depending on where you live and the policies made available to you by your chosen insurer, which means any information we offer here is general in nature.

If you are considering insurance for a property you own, one that you are buying, or the contents of a home that you rent, take the time to seek independent advice, read any policies carefully, including their clauses and inclusions, and be fully cognisant of the guidelines and laws which apply in your state or territory.

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