Victorian government pet policy for tenants will trigger higher landlord insurance
Landlord insurance will go up after the Andrews' Government pet policy for tenants is introduced in Victoria next year.
Canstar says most exisiting landlord insurances don't include covering damage from pets.
"Landlords should check with their insurer to see if they’re covered, before allowing pets at their property," one industry adviser recently stressed.
“Before allowing pets at your property, it’s a good idea to establish a pet agreement between you and your tenant,” they said.
“You should also outline the consequences if a tenant fails to meet their obligations.”
It is recommended property managers closely monitor whether animals are present at the property by conducting regular property inspections.
Landlord insurance is an absolute must for property investors, providing financial security against damage, rent defaults or theft.
"Landlords need to be wary of getting a cheap landlord insurance policy with lots of exclusions," Canstar noted.
The Canstar tables below show the median rental income, average insurance costs, and percentage of rental income across capital cities in Australia. The costs are based on a landlord insurance policy with $300,000 of building insurance cover (for houses) and $25,000 of contents insurance (for both houses and units).
| Location | Median Annual Rental Income | Average Annual Insurance Premium | Percentage of Income spent on Insurance |
|---|---|---|---|
| Sydney | $27,560
($530/week) | $1,160.53 | 4.2% |
| Melbourne | $20,800
($400/week) | $928.07 | 4.5% |
| Brisbane | $20,800
($400/week) | $1,112.37 | 5.3% |
| Adelaide | $18,460
($355/week) | $891.82 | 4.8% |
| Perth | $20,280
($390/week) | $939.41 | 4.6% |
| Hobart | $18,200
($350/week) | $836.91 | 4.6% |
| Source: Average premiums from CANSTAR – Landlord Insurance star ratings report. | |||
In Sydney insurance costs 4.3% of rental income.
The price of insurance in Melbourne equates to 4.2% of income.
Hobart is the cheapest place for insuring an investment property, for houses (above) and apartments (below).
| Location | Median Annual Rental Income | Average Annual Insurance Premium | Percentage of Income spent on Insurance |
|---|---|---|---|
| Sydney | $27,300
($525/week) | $419.25 | 1.5% |
| Melbourne | $19,760
($380/week) | $335.49 | 1.7% |
| Brisbane | $19,760
($380/week) | $396.99 | 2.0% |
| Adelaide | $14,820
($285/week) | $316.61 | 2.1% |
| Perth | $17,420
($335/week) | $347.55 | 2.0% |
| Hobart | $14,820
($285/week) | $307.57 | 2.1% |
| Source: Average premiums from CANSTAR – Landlord Insurance star ratings report.
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The NSW Left faction of the Labor Opposition has also been considering a policy that would stop all landlords in the state from banning pets from their properties.
A proposed policy doing the rounds within the Labor Left seeks to propose an amendment to the ALP’s policy platform that “disallows ‘no pets’ clauses”, the Daily Telegraph reported earlier this year.