Explore Home & Contents Insurance

What is landlord insurance?

Landlord insurance is a type of home insurance that typically covers the building and permanent fixtures of your investment property if they’re destroyed or damaged by events defined in the Product Disclosure Statement (PDS). It differs from standard home insurance as landlord policies also have the option to add cover for things like loss of rent, tenant default and malicious damage.

You also have the option to purchase contents insurance to protect any belongings you’ve leased to your tenants (in the case of furnished accommodation) or a combined home building and contents cover. If you own a building or complex with multiple homes, strata insurance may be a more suitable product for the protection of said building.

Remember that each landlord policy is different. Some policies will cover you for a wide range of events, while others will only cover you for a selection of scenarios, so always review the relevant Product Disclosure Statement (PDS). That way, you can make sure the policy you’re purchasing covers the events you want protection for.

What is a landlord responsible for?

Being a landlord means you’re responsible for protecting your tenanted property against insurable events (such as fire and storms) that might cause damage to your investment. This is on top of maintenance and repairs, security installations and ensuring the premises are fit to live in and in good condition.

Some other types of loss or damage that may be covered under your landlords insurance policy include:

  • Loss or damage to fixtures and fittings, which includes items inside your property such as your carpets, curtains, air conditioner/heater, stove and dishwasher.
  • Theft or malicious damage caused by tenants or their visitors.
  • Legal liability when a problem at your property causes loss, damage, injury or even death to another person or their property.

If you’re renting out a fully or partially furnished property, your contents insurance policy may also respond to loss or damage to:

  • Your furniture
  • Curtains
  • Household goods (i.e., utensils, electrical appliances, whitegoods)
  • Blinds
  • Floor coverings (i.e., carpets, rugs)
  • Detachable light fittings.

Luckily, building cover and contents insurance for landlords can help the costs associated with these losses, depending on your level of cover. Be sure to read the Product Disclosure Statement (PDS) for the full details of a policy before you purchase it.

How does landlord insurance work?

Landlord insurance is designed to help protect your investment property and your personal contents inside. This type of insurance typically covers the buildings, permanent fixtures and furnishings from damage caused by insured events like fires, storms, floods and impacts. Some policies can even cover a loss of rent or a tenant defaults.

Landlord insurance allows you to insure the building solely, just the contents, or both the building and contents, depending on the cover you have selected. If you’re a landlord in the market for a new policy, you can compare and purchase cover within minutes for free with our easy-to-use landlord insurance comparison service.

What does landlord insurance cover?

Landlord insurance covers a range of incidents and events, including some that are unique to rental properties. With any insurance policy, it’s vital to first go through the policy documents (including your PDS) before purchasing a policy. This document outlines the terms, conditions, limits, inclusions and exclusions of a policy, as well as the amount you may be eligible to receive for these insured events.

Some events (like flood damage and electric motor burnout) may be offered as optional cover, which you can add to the cost of your policy. You may also be able to purchase optional cover in the event that your tenant defaults on their rent or causes malicious damage to your property.

The table below outlines the common inclusions and exclusions of landlord building insurance, landlord contents insurance, and landlord combined insurance. It is important to review the PDS to ensure the cover meets your needs as the definitions and payout limits varies between policies.

EventLandlord building insuranceLandlord contents insuranceLandlord combined building and contents insurance
Storm damage YesYesYes
Fire damage YesYesYes
Flood damage Yes/Optional extraYes/Optional extraYes/Optional extra
EarthquakesYesYesYes
Movement of the sea NoNoNo
Theft (by someone other than your tenant)YesYesYes
Vandalism and malicious acts (by someone other than your tenant)YesYesYes
Lease break and loss of rent YesNoYes
Legal liability cover YesYesYes
Legal action against bad tenants YesNoYes
Rent default Yes/ Optional extraYes/ Optional extraYes/ Optional extra
Impact damage YesYesYes
Falling trees (under impact or storm damage)NoNoNo
Motor burnout Yes/Optional extraYes/Optional extraYes/Optional extra
Damage from vermin NoNoNo
War and uprising NoNoNo
Accidental damage and breakage to glass and ceramics Yes/Optional extraYes/Optional extraYes/Optional extra
Escape of liquid YesYesYes
Removing debris Yes/ Optional extraNoYes/ Optional extra
Damage from renovations NoNoNo

There may be terms, conditions, limits and exclusions attached to your coverage, so make sure you read and understand the policy documents before taking out insurance.

Landlord giving tenant keys, covered by landlord insurance

Learn more about landlords insurance

Why is landlord insurance important?

You could have the best tenants in this part of the world, or your property might be in one of the safest suburbs. But even an airtight rental agreement and regular maintenance won’t stop things from going wrong, like carpet stains or major incidents such as a fire or flood. A landlord insurance policy could help protect you from expensive repairs that result from these types of incidents.

How much does landlord insurance cost?

The cost of landlord insurance is different for every person. This is because, like other types of insurance, your premiums are influenced by a number of factors that are usually unique to you. Some of these factors that can affect the cost of your landlord insurance policy include:

  • The location of your property. Many Australian homes are vulnerable to a range of natural hazards such as floods, bushfires, cyclones, storm surges, subsidence and erosion (including sinkholes). If your property is located in a hazard-prone area, this will reflect on the cost of your landlord insurance policy.
  • Your suburb’s crime rate. The higher the crime rate in your property’s area, the more your insurance policy will likely cost.
  • Sum insured. How much your building and contents are insured for should you need to rebuild or replace them generally influences your premium.
  • Untenanted periods. Aside from lease breaks, some landlord insurances typically won’t cover periods when your property is left untenanted for an extended time.

Read through the PDS, look out for any confusing information and seek a clear explanation from your policy provider if you’re unsure. If you would like an idea of how much you could pay for a policy, you can get a landlord insurance quote from our comparison service

Is landlord insurance tax deductible?

As a general rule, your landlord insurance premiums are tax-deductible, as well as other expenses associated with renting out your property like:1

  • Advertising for new tenants
  • Property management fees
  • Council rates
  • Water bills
  • Land tax
  • Cleaning, gardening and lawn mowing bills
  • Pest control expenses
  • Property repairs and maintenance
  • Real estate agent fees and commissions
  • Interest charged on your home loan
  • Legal expenses for:
    • Evicting a defaulting tenant
    • Taking court action for loss of rental income
    • Defending a damages claim brought on by a third party for injuries suffered at your rental property.

Before making any decisions about your tax return, consider speaking with an accountant or other professional.

How do I ensure I'm covered for the right amount?

As an Australian landlord, fires and floods are among the big risks to your investment property. Catastrophic events like these can leave you with a massive repair bill, and you could find yourself unable to afford the repair and rebuilding costs to your property.

This is why you need to estimate the full replacement value of your property and take inventory of all your belongings there. Here are a few things you can do to achieve this:

  • Document everything you own – your rental property, permanent fixtures, furnishings and any contents residing within the property – for insurance purposes. Videos are good for this.
  • Keep the receipts and take photos of all your items leased with the property to make sure there’s a record of your ownership.
  • Work out the accurate value of your property and contents. You might find some online calculators that can help you do this.

Can I get landlord insurance for a holiday rental?

If you lease your property as short-stay accommodation (e.g. Airbnb), you’ll need to ensure that you have the right type of cover. Many policies that cover landlords will not provide cover for short-stay accommodation. You may need to seek out a specialist policy or provider to cover your holiday rental property.


Stephen Zeller, General Manager

Meet our landlord’s insurance expert, Stephen Zeller

As the General Manager of General Insurance at Compare the Market, Stephen Zeller works to make the protection of a homeowner’s most significant financial assets, an easier and more efficient process whilst empowering people with choice. He believes it’s important for landlords to adequately cover their property and belongings against risks that could result in financial loss.

Stephen has more than 30 years of experience in the financial services industry. He is an Allied member of the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and ensures any information about insurance products that we publish is accurate and comprehensive.

Stephen’s top tips for landlords

  1. Keep all your entry and inspection reports. Keeping a record of the state of your property each time you inspect it can help you should you need to claim for an issue.
  2. Regularly inspect your property. By keeping a close eye on your property, you can stay on top of any issues that arise before they grow into major problems.
  3. Save on premiums with a higher excess. Some providers might offer you the choice of a higher excess to lower your premiums or vice versa. This can be a good way to save on your premiums, provided that you will be able to pay the higher excess in the event of a claim.
  4. Always have a written rental agreement. That way, there can be no dispute about the terms of the lease should either party have an issue.

Sources

1 Australian Government: Australian Taxation Office – Rental expenses you can claim now. Last updated August 2021. Accessed October 2021.

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