Landlord insurance

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What's the difference between tenant default and loss of rent?

Generally speaking, tenant default covers your net income in case your tenant is unable to pay their rent. It's a benefit often offered as an option when you're buying a policy.

Loss of rent is usually a benefit included in your landlord insurance policy and covers the loss of income if your property needs repairs or rebuilding, and therefore, cannot be occupied for some time.

warningSome landlord insurance policies have temporarily removed benefits such as rent default and a few others because of the pandemic. Make sure to check this with the insurer before deciding on a policy.

Compare landlord insurance brands in Australia

1 - 5 of 9
Name Product Tenant Default and Damage Loss of Rent Accidental Damage Sum Insured Safeguard Cooling-off Period Cheapest way to pay
Budget Direct Landlord Home & Contents Insurance

Optional

10% of the sum insured amount of your property
21 days
Annually
Save 30% on your first year's premium when you buy a combined home and contents policy online. T&Cs apply.
QBE Landlord Home & Contents Insurance
The lesser of: Up to 24 months of lost rent, or 20% of your sum insured amount
21 days
Annually
Get 10% off for buying a combined policy, plus an additional 10% in the first year for signing up online. T&Cs apply.
Qantas Landlord Home and Contents Insurance

Optional

10% of the sum insured amount of your property
21 days
Annually
Earn up to 20,000 Qantas Points when you apply. Points awarded will be based on your premium. T&Cs & exclusions apply.
Seniors Landlord Home & Contents Insurance
The lesser of: 12 months rent, or 10% of your building sum insured, or the lost rent
14 days
Annually
Buy online and save up to 15% on landlord building and contents policies in the first year. T&Cs apply.
Youi Landlord Building and Contents Insurance

Optional

The reasonable rental amount for up to 12 months
20 days
Annually
Cover for investment property from fire, theft and numerous weather events.
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Compare landlord insurance special offers for April 2022

Deal

15% online discount on landlord insurance

Save 15% on your first year's premium when you purchase cover online. T&Cs apply.
Deal

Earn up to 20,000 Qantas Points with Qantas Landlord Insurance

Earn up to 20,000 Qantas Points (points based on your premium after 60 days). T&Cs, eligibility & exclusions apply.
Deal

Buy online and save up to 15% on a landlord insurance policy with Australian Seniors.

Offer applies to new policies bought online. Discount is made up of a 10% online discount for the first year, and a further 5% if you buy a combined building and contents policy. T&Cs apply.
Deal

Get up to 20% off your first years’ premium with QBE Landlord Insurance

Discount is made up of a 10% online discount, and a further 10% for buying a combined policy. T/Cs apply.

What does landlord insurance cover?

Landlord insurance offers a broad range of protection across 3 critical areas: loss of rental income, damage to building and damage to contents.

Loss of rental income

Landlord insurance protects you against the loss of rental income due to the following events and circumstances:

  • Absconding tenant. This refers to a tenant moving out without giving proper notice, or if they move out at the end of the lease and leave rent unpaid.
  • Defaulting tenant. You’ll be covered if a tenant fails to pay their rent and is either issued with a termination notice, or has their lease terminated by court or tribunal order.

Damage to building

If there is loss or damage to your building caused by tenants, their family members or guests they invite onto the property, landlord insurance will offset the cost of repair or replacement. Cover is included for the following:

  • Insured events. Just like a regular home insurance policy, landlord insurance provides cover against events such as fire, flood, storm and water damage. It includes demolition, removal of debris and rebuilding costs.
  • Accidental loss or damage. Your building is covered against sudden and unexpected loss or damage.

Contents

Landlord insurance also provides protection for the contents you own, or for which you are legally responsible, in your investment property, including the following:

  • Accidental loss or damage. You’re covered for sudden or unexpected loss or damage to contents.
  • Intentional and malicious damage. Protection for damage caused by a tenant or by any other unknown person.

What additional benefits are available?

As well as standard items, some landlord insurance policies offer additional benefits. These can include:

  • Legal expenses. If the insurer has accepted a claim for loss of rent, your policy can cover the legal expenses you incur when attempting to reduce your loss, or if you have to organise a legal defence.
  • Representation expenses. If your property manager represents you in court or at a tribunal hearing, your insurance covers their representation fee.
  • Sheriff/bailiff fees. Covers the cost of engaging a bailiff or sheriff to evict a tenant.
  • Tax audit costs. If the ATO or another government authority conducts an audit of your financial affairs, landlord insurance can cover the professional fees you incur as a result.
  • Legal liability cover. You’re covered for legal liability if you’re at fault when a tenant or another party dies or suffers a bodily injury at your property, or when someone else’s property is damaged.
  • Replacement of locks. If a tenant is evicted by court order and you need to change the locks, landlord insurance can cover this cost.
  • Removal of tenant’s possessions. If a tenancy has ended and you’ve made an insurance claim for loss of rent, your policy may cover the cost of removing the tenant’s possessions from the property.

What impacts the price you pay for insurance?

Landlord tenants Image: Getty Images

Landlord insurance costs are influenced by a number of factors, including:

  • The value of your building and contents. Ultimately, the more you insure your building and contents for, the higher your premiums will be.
  • The type of property. Freestanding homes will usually cost more to insure than apartments in apartment buildings since they're generally exposed to more risks.
  • The building materials. Buildings made with sturdier materials like concrete will be cheaper to insure since they're less likely to be damaged.
  • Where the property is located. Homes in riskier areas like high-crime neighbourhoods will cost more to insure than similar homes elsewhere since they are more exposed to certain types of risks.
  • The landscape. Other unique factors about your property will factor into your risk profile. For example if you're surrounded by tall trees, you might be at risk of impact damage.
  • How secure your property is. Having strong security features like deadbolted doors and an alarm system can help bring your costs down since they will prevent certain types of claims.
  • Your claims history. If you've previously made multiple claims on your landlord insurance policy, you can expect an increase in the cost of cover in the future.
  • Any additional options you choose. If you choose a policy with extra features like tax audit cover and cover for your legal fees, you can usually expect to pay a little more.

The easiest way to estimate your costs is to compare landlord insurance quotes from a few different insurers.

Promoted
Save 30% on your first year's premium when you purchase a new combined Home & Contents insurance policy online. T&Cs apply.

Why do I need landlord insurance?

There are a lot of costs to consider when buying and managing an investment property, so why should you pay out even more by buying landlord insurance? There are several reasons why it’s a worthwhile investment:
  • It protects you against risks faced by landlords. As a landlord, you’re exposed to a range of unique risks that don’t affect ordinary homeowners. The best landlord insurance provides the financial protection you need to look after your investment property.
  • It provides peace of mind. In many cases, the security bond won’t be enough to cover you for tenant-related losses. Landlord insurance is designed to guarantee that you won’t be left out of pocket when something goes wrong with your property.
  • Your premiums are tax-deductible. Landlord insurance is classed as an investment expense, which means that the premiums you pay towards your policy can be claimed as tax deductions.
  • Cover is available for short-term rentals. Landlord insurance doesn’t just cover long-term tenancies; there are also policies available to cover short-term rental arrangements, such as renting out your property through websites like Airbnb or Stayz.

What should a body corporate cover?

If your investment property is in a strata-titled building, as it might be if it’s an apartment or a unit, it’s important to be aware of what situations are covered by your landlord insurance and what falls under the residential strata insurance policy.

Also known as body corporate cover, residential strata insurance covers the common property managed by strata or the body corporate. This means it provides cover for loss or damage to the following:

  • The building and any of its structural improvements
  • Fixtures which form part of the building
  • Outbuildings
  • Common areas
  • Fences and gates
  • Fixed swimming pools
  • Playing surfaces, such as tennis courts
  • Above-ground and underground services
  • Lawns, trees, plants and gardens

It also covers contents located in a common area, such as:

  • Carpets
  • Furniture and furnishings
  • Blinds and curtains
  • Light fittings
  • Portable appliances
  • Temporary wall, floor and ceiling coverings

However, the exact list of items and areas covered varies between insurers, so check the policy's product disclosure statement (PDS) for full details of the cover provided.

What exclusions should I be aware of?

When you compare the best landlord insurance policies, make sure to take a close look at the list of general exclusions. These are situations and events which the insurer will not cover, such as:

  • Any intentional act committed by you, your family or anyone acting with your consent
  • Water entering the building through an opening made to renovate or extend the property
  • Poor housekeeping by your tenants, such as unhygienic or untidy living habits
  • Rust, wear and tear, mould or mildew
  • The lawful seizure of your property
  • Loss or damage caused by insects or vermin
  • Repairs carried out by the tenant with your consent
  • If you breach the lease agreement
  • Loss or damage that arises due to keys being provided for property inspections
  • The tenant using the property for trade, manufacturing or childcare with your knowledge or consent
  • The lawful seizure of the property
  • If the property is vacant, is not advertised for sale and no effort is being made to either prepare the property for a new tenant or find a new tenant

Read the PDS closely for a full list of general exclusions.

How to choose the best landlord insurance policy

Landlord insurance may seem complex and confusing, but keeping a few simple tips in mind can make it a whole lot easier to select the right cover:

  • Check that pet damage is included. Not all policies cover damage caused by pets owned by tenants or their guests. Check the fine print to find out whether or not this is the case.
  • Cover while untenanted. It’s also a good idea to check whether you will still be covered if the property is left untenanted for an extended period. You may have to satisfy specific conditions to ensure that cover remains in place, such as actively seeking a replacement tenant.
  • Building-only versus combined cover. If you’re renting out a fully furnished property, contents insurance is a must. However, if your property is unfurnished, you may decide you don’t need it. Just remember that carpets, curtains, internal blinds and a range of other items are only covered by contents insurance, so you may still be better off with a policy that provides combined building and contents cover.
  • Shop around. Compare several landlord insurance policies to see how they stack up against each other. Obtain quotes for each suitable policy so you can select the best one available.

Do policies cover me against damage caused by tenants’ pets?

Landlord insurance is not designed to cover damage caused by tenants’ pets. However, you can still find a limited level of damage cover and liability cover for injuries caused by animals kept on the premises.

Generally you are limited to specific types of damage cover and insurance for damage caused by pets that are deceptively kept on the premises in breach of the tenancy agreement.

For the most part, landlord insurance is not designed to protect against damage caused by pets outside of liability cover, which can insure against injuries caused by pets to visitors. Any cover for damage caused by pets is typically restricted to specific ornamental items that have been knocked over by pets. Or a policy might include a limited amount for damage caused by pets that were kept on the premises without your knowledge, when specifically prohibited under the tenancy agreement.

Top landlord insurance tips

Tenant and landlord Image: Getty Images

Remember these simple rules to ensure that you get the most from your landlord insurance policy:

  • Get a signed agreement. Many insurers will not provide cover if you do not have an official tenancy agreement in place that you and the tenant have both signed. Make sure you have a written agreement before a tenant moves in.
  • Buy cover before your tenant moves in. Make sure you purchase cover before your tenant actually moves into your property. If they have already moved in and fall behind on rental payments before you buy a policy, your insurer probably won't provide any cover.
  • Conduct regular inspections. Regular property inspections are essential not only to minimise the risk of tenants damaging your property, but to also back up any claim you make on your policy.
  • Keep detailed reports. Completed entry and exit reports with supporting photographs will protect you if any damage arises.
  • Check exactly what's covered. If you choose a landlord policy that also covers some of the contents of the property, look closely at the fine print to see exactly what is included. For example, check what fixtures and fittings are listed. Most policies offer protection for damage to items such as pipes and cables, fixed appliances, sheds, exterior blinds and awnings and in-ground swimming pools.

Who offers landlord insurance in Australia?

Here are some of the insurers that offer landlord insurance in Australia:

FAQs


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16 Responses

    Default Gravatar
    PeterFebruary 23, 2022

    Would you have any insurance companies to recommend that covers a building that is Class 1b – Boarding House (Rooming House)?

      Avatarfinder Customer Care
      JamesApril 3, 2022Staff

      Hi Peter,

      Boarding houses are a common exclusion of landlord insurance. You may want to speak with an insurance broker to see if they can help you find specialist cover that meets your needs.

      Regards,
      James

    Default Gravatar
    JulieDecember 13, 2021

    Hi,

    We are needing landlord building insurance for a private residence rental property which has a secondhand bookshop attached.

    Can you suggest where to try?

      Avatarfinder Customer Care
      JamesJanuary 26, 2022Staff

      Hi Julie,

      You can go ahead and compare a number of landlord insurance brands on this page. Use the table above to compare your options.

      By selecting the “Get quote” button, you’ll be taken to the insurer’s website where you can find a policy that’s matched your needs.

      I hope this helps.

      Regards,
      James

    Default Gravatar
    LawrenceNovember 29, 2021

    Hi ,
    My tenant has left the appartmentwithout notice and has left all their personal items and furniture in the unit and in all rooms as well as muliple bags of waste and rubbish ! The unit is littrered with rubbish in every room ! Will landlord insurance cover the rubbish and furniture removal and disposal ?

      Avatarfinder Customer Care
      JamesNovember 30, 2021Staff

      Hi Lawrence,

      I’m really sorry to hear that. There are landlord insurance policies that will pay out some costs relating to short-term storage and the legal disposal of discarded items. If you have an existing cover, review your policy document to check it’s coverage and exclusions. You could also reach out to your provider directly for guidance.

      I hope this helps.

      Regards,
      James

    Default Gravatar
    ElizabethOctober 27, 2021

    I need help to find insurance for my Airbnb apartment which will cover me for public liability. The apartment is part of a body corporate which covers communal areas.
    Many thanks

      Avatarfinder Customer Care
      JamesNovember 10, 2021Staff

      Hi Elizabeth,

      By agreeing to list your property on Airbnb, as a host, you agree to be covered under Host Protection Insurance for occurrences during Airbnb stays. Host Protection Insurance may cover your legal responsibility to a guest or third party that gets hurt or has their property damaged due to an incident related to an Airbnb stay.

      You can view our guide on short term rental and Airbnb insurance as a reference.

      For additional cover, you can request to speak to a broker about public liability insurance. The broker will be able to give you personalised advice as well as options based on your situation.

      Don’t forget to read the policy’s Product Disclosure Statement (PDS) so that you’re aware of what you’re covered for, along with any exclusions or restrictions before applying.

      I​ hope this helps!

      Regards,
      James

    Default Gravatar
    LandlordsFebruary 7, 2018

    What are the Premiums for Landlords Insurance.
    3 br BV 12 Squares
    Location – Burleigh Waters
    For – $300.000
    $350,000
    $400,000

      Avatarfinder Customer Care
      MayMarch 1, 2018Staff

      Hi there,

      Thanks for your inquiry.

      The premiums you pay towards your policy can vary. Generally, how much you pay for cover would depend on factors such as type of property you own, where it is located, the value of your building and contents, the site itself, etc. It would be best to get in touch with any of the brands featured above to discuss the cost. You can click on the ‘Go to site’ button if you like to get to the brand’s main page.

      Cheers,
      May

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