What insurance do you need when buying a property?

As we have seen with the recent east coast floods, unforeseen disasters can strike at any time. That’s why it’s so important to protect yourself and your family financially – with the right kind of insurance for when something unexpected happens.

Sure, insurance may not be all that flashy and many people downright begrudge having to pay for it. But it gives you something that’s invaluable: peace of mind that your financial plans are protected, no matter what.

Here are the types of insurance you should think about when buying a property.

Income protection

Say you get sick or have a bad accident and cannot work. Income protection is your financial safety net.

Income protection insurance pays part of your lost income for a set time if you’re unable to work due to partial or total disability, caused by sickness or injury. It takes the financial pressure off you while you get back on your feet and enables you to cover your mortgage repayments and other expenses (PRO TIP: It’s always a good idea to check whether you have income protection insurance through your super fund!).

You may also like to consider trauma insurance, total and permanent disability insurance and life insurance to protect you and your family’s financial future.

Mortgage protection

Mortgage protection insurance covers the cost of your mortgage repayments if you die or become seriously ill. It should be noted that it is only meant to cover your mortgage repayments and not any other expenses for you or your family.

Mortgage protection insurance may be a wise choice if you already have some other kind of life insurance – say with your super plan.

Landlord insurance

If you own an investment property, be sure to look into landlord insurance. This type of insurance can cover you against the risks landlords often face. Examples include tenant damage, theft, vandalism, fire, storms and other natural disasters.

It may also protect you if the tenant stops paying rent, as well as against other legal liabilities.

As with any insurance choice, it’s important to read the Product Disclosure Statement (PDS) to check what exactly is covered.

Building & Contents

Building or home insurance protects against the cost of rebuilding or repairing your property from things that are outside your control, like fire or natural disasters. You can opt for total replacement cover (to rebuild your home as it was prior to the event), or sum-insured cover (coverage up to a certain amount).

When you buy a property, your mortgage broker will most likely recommend that you insure the property before settlement day. When choosing your policy, make sure you have the right amount of coverage, as well as the right type of insurance for your actual needs.

Contents insurance protects your belongings, including carpets, rugs and curtains, in events such as fires, storms or theft. Often it will be bundled together with home insurance.

How can FinancePath help?

If you are planning to purchase a property, would like to review your current insurance arrangements or would just like peace of mind, contact the FinancePath team and we can refer you to one of our trusted partners to assist with your requirements.

Get in touch today.