How is landlord insurance different to home insurance?
Like home insurance, landlord insurance may help protect your property against unexpected events such as theft, fire, flood and storm damage.
Landlord insurance is designed with rental properties in mind, so it may include cover for risks that standard home insurance usually doesn’t.
These additional benefits may include cover for tenant damage to the property or loss of rental income following certain insured events.
Do I need landlord insurance?
Landlord insurance is not a legal requirement in Australia. However, if you have a home loan on an investment property, some lenders may require you to hold adequate insurance as part of your loan conditions. This is due to the property being used as security for the loan, so lenders generally want to know it can be repaired or rebuilt after an insured event.
For landlords, insurance may meet loan requirements while providing protection against rental risks, such as tenant damage or loss of rent.
What’s covered under landlord insurance?
Landlord insurance typically falls into two main categories: building cover and contents cover. Depending on your property, budget and needs, you may choose one or both. Some insurers also offer optional extras for an additional cost.
- Building cover generally applies to the property itself including the main home and, in some cases, permanent structures such as a garage or granny flat. If your property is part of a strata scheme, it may already be covered by strata insurance.
- Contents cover generally applies to items you own and provide for your tenants to use. Depending on the policy this might include furniture, fixed carpet, appliances and even free-standing swimming pools
- Optional cover can vary between insurers, but may include protection for events such as rent default, legal expenses, malicious damage, theft by tenants or motor burnout.
Choosing the appropriate cover can help you feel more prepared if something goes wrong.
Because every policy is different, it’s important to read the Product Disclosure Statement (PDS) before you decide if it meets your needs.
What if my property is part of a strata scheme?
In most strata arrangements, the owners corporation arranges strata building insurance. This often covers the main structure and shared spaces, which can mean separate building cover might not be necessary.
You may still want to consider landlord contents cover for items inside the unit such as furniture, appliances and carpets.
It’s always a good idea to check with your strata manager to confirm what’s included in the strata policy before deciding if you need extra cover.
Are short-term or holiday rentals covered?
Coverage for short-term, holiday or seasonal rentals, including those listed on platforms such as Airbnb or Stayz, can vary between insurers. Some policies may exclude these arrangements or apply specific conditions, so it’s important to review the details of your policy carefully to understand what is and isn’t covered.
Can landlord insurance cover loss of rent?
For many landlords, rent is an important income stream that informs an investment plan. So if rent stops coming in, it can quickly become both stressful and costly. Some landlord insurance policies may cover loss of rent in certain situations, such as when your property can’t be lived in after an insured event.
