Do You Need Landlord Insurance? 

In 2021, the Malaysia Institute of Estate Agents (MIEA) has introduced MIEA Landlord Insurance to protect residential property owners from financial losses incurred by problematic tenants, such as runaway tenants, rent arrears and damages to their assets.

Under the policy, policyholders will be compensated if they met the following circumstances:

• Loss of rental income due to tenant runaway
• Legal expenses for Letter of Demand
• Loss or damages due to malicious acts by tenant
• Cleaning service cost incurred when contents of premises are destroyed or damaged by tenants
• Repairing or replacing doors, locks, access card and keys
• Replacement of structures made of glass materials, including shower doors and windows
• Maintenance services such as plumbing, drainage, air-con and toilet repair
• Losses due to theft or burglary committed by tenants

Similar to other landlord insurances in the market, to be eligible for this policy, the landlord must possess a valid tenancy agreement with a signed term of more than 12 months, while the tenants will also be checked for records of bankruptcy or eviction in the past five years.

While landlord insurance is not something new in the market, it is not a compulsory commitment for a landlord hence it has always been mistakenly not an important investment, be it for personal gain, nor the entire property industry.

However, with the launch of the MIEA Landlord Insurance, it has once again highlighted to the public that landlord insurance will not only benefit the landlord, it also protects the public and provide an environment for professional real estate agents to be competitive in enhancing their services, which will eventually benefit the entire property rental market.

Now, you may ask why I should get landlord insurance, isn’t there a tenancy agreement to protect a landlord? In fact, a tenancy agreement can actually only go so far and do so much because it mainly outlines the duties and obligations of each party during the tenancy period, as well as to prevent the landlord from raising the rental fee indiscriminately within the rental period.

Here is how landlord insurance can protect you from losses during the tenancy period:

1. Losses occur during tenancy period
   Besides the rental losses when your tenant runaways, other unfortunate incidents that cause losses will be covered under a landlord insurance too, such as the property being damaged by natural disasters such as storm and flood, which caused your unit is uninhabitable for some time, or the financial loss when your tenant runaway with some of the items belong to your partly and furnished property.

2. Malicious damage
   Either malicious or as an act of vandalism that was done by your tenant, and your tenant is not prepared to pay to have the damage remedied, you can claim for your financial loss through appropriate insurance. Apart from that, a landlord insurance also offers to cover the reasonable property maintenance cost, such as burst pipes, break-ins that damage the door lock, among others.

3. Public liability
   This is the most important benefit, especially when it comes to commercial properties. Under the insurance, it insures you against an injury or death that occurs on your property, and the tenant or a visitor who is injured on your property decides to take legal action against you. The policy also provides additional cover for legal expenses that are incurred in remedying an issue with a tenant, such as legal costs for a letter of demand.