insurance considerations for Granny Flats

The idea of your ageing parents or loved ones living close by on your own property as they get older sounds like a dream come true. They’ll be able to have their own space while still being within easy reach for visits from nurses and care assistants.

The financial benefits of building a granny flat are also appealing to many homeowners. However, there are a lot of legal considerations when it comes to building or renting out a granny flat and these can be complex. Landlord insurance, for example, may be required to be in place. It covers the landlord for the unique risks that come with renting out a property and can include loss of rent, tenant damage and legal liability. It’s not the same as home and contents insurance which only covers the owner of a home for their personal belongings.

Granny Flats are a great way for grandparents and other family members to enjoy some independence, while still being close by for the grandchildren. They can have their own kitchen, bathroom and bedroom, while having access to the main house if they choose. This is particularly beneficial for those who require some level of care as they age, helping them to feel more self-reliant and reducing the cost of nursing homes or residential aged care.

What are the insurance considerations for Granny Flats?

In order to build a granny flat, you’ll need documented certification and approvals from council. This can take some time so we recommend starting your research as soon as possible. A good place to start is by reaching out to builders in your area. Ask for references from previous nearby customers and speak with them in person. You’ll be able to gauge whether customers were satisfied with the work completed, if costs matched estimates and if timelines were met. You can also learn a lot about builders by speaking with neighbours who have had granny flats built recently.

Once you’ve found a builder, be sure to read the detailed policy terms (PDS) carefully. The PDS will let you know what is and isn’t covered by the policy, as well as any exclusions or limitations that apply. For example, a typical insurance policy excludes damage caused by wear and tear or a gradual decline in value, such as from an earthquake or flood.

If you’re planning on building a granny flat for rental purposes, consider landlord insurance which will cover the unique risks associated with this. It can include losses of rent, tenant damage and legal liability in the event of an insured event such as fire or flood. Some landlord insurance providers offer coverage for loss of rental income as well, which is a valuable added feature that can be difficult to find with standard home and contents insurance policies.

If you’re thinking of adding a granny flat to your property, it’s important that you speak with an experienced broker who can advise you on the best option for your situation. They can help you find a policy that will suit your needs and budget, as well as help you navigate any potential legal or insurance issues that may arise during the process.

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