What Is Landlord Insurance In Australia: A Complete Guide

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Students want to know what landlord insurance is in Australia.


There is always a risk of unintentional or spiteful damage to your property that can land you in big trouble. No matter how thoroughly you have evaluated your tenants.


Landlord insurance provides property owners financial security and protects them against unexpected events that can impact their investments.


This blog will help you understand landlord insurance, what protection it offers, tips for finding the best one, and answer some basic questions.



1. What Is Landlord Insurance In Australia?


Landlord insurance is an insurance policy for property owners who lease their property. This insurance applies to all property types, including a house, an apartment, a tent house, or a unit.


Landlord insurance offers three main types of covers:


  • Tenancy cover

  • Building insurance 

  • Contents insurance


Thus, based on your chosen cover, your landlord insurance will protect:


  • Only the property building

  • Only the property contents (permanent fittings and furnishings)

  • Property contents, as well as the building from a variety of insured events


Though it is not compulsory to have this insurance in Australia, it is a wise investment that covers a landlord’s rental property against the most common risks.



2. What Does The Landlord Insurance Cover?


The coverage you get from landlord insurance depends on the type of premises you are renting out, your insurance provider, the chosen level of coverage and the type of your policy.


Here is a general list of things that cover your policy:



Tenancy Cover


  • Liability

  • Litigation expenses

  • Default or loss of rent payment

  • Theft or damage by tenants



Contents Cover


This component of landlord insurance covers any damage to the contents of the rented property. It includes:


  • Water damage

  • Destruction

  • Falling of antennae or trees

  • Floods

  • Accidental breakage of glass

  • Thunderbolt

  • Explosions

  • Fire

  • Tremors



Building Cover


The insurance policy covers repair costs to building damage related to any of the following:

  • Smoke or Fire

  • Storm 

  • Flood

  • Riots 

  • Lightning

  • Impact damage

  • Falling trees

  • Theft or robbery 

  • Tsunami or Earthquake

  • Bursts

  • Malicious acts

  • Liquid-related damage

  • Vehicle crashes



3. What Does The Landlord Insurance Policy Not Cover?


Here are the events where a landlord’s insurance policy would not cover your property:


  • General wear and tear

  • Repairs by the property owner 

  • Repairs by unqualified people on the landlord’s instruction on the rented property 

  • Mould outbreaks 

  • Damage due to vermin, insects, and rodents

  • Accidental damage 

  • Damage or arrangements by a landlord with malicious intent, like hidden camera installation in the rental property, to keep a watch on tenants without their notice. 

  • War 

  • Damage caused due to pets. 

  • Expenses incurred on regular maintenance.

  • Building design or construction issues

  • Tenant contents

  • If the property owner violates the rental agreement and not the tenant

  • Market-driven risks



4. How To Compare Landlord Insurance?


Are you a landlord in search of a new landlord insurance policy? If yes, Here is a comparison of some of the best landlord insurance in Australia to help you find the right insurance for your needs. 


The insurance policy covers the following causes:


  • Smoke or Fire

  • Storm 

  • Flood

  • Riots 

  • Lightning

  • Impact damage

  • Falling trees

  • Theft or robbery 

  • Tsunami or Earthquake

  • Bursts

  • Malicious acts

  • Liquid-related damage

  • Vehicle crashes



Insurer Name Loss of Rent Tenant Rent Default and Damage Accidental Damage Cooling Off Duration Cost-Effective Payment Mode
Budget Direct Landlord Insurance 10% of the sum insured Elective Not Offered 21 days Yearly
Youi Building and Landlord Insurance Up to 12 months rent Elective Not Offered 20 days Yearly
Qantas Landlord Home and Contents Insurance 10% of the sum insured Elective
Not Offered

21 days
Woolworths Landlord Building and Contents Insurance 10% of the sum insured or the lost rent or 12 month’s rent (whichever is LOWER) Not Offered Offered 14 days Yearly
CommBank Landlord Building and Contents Insurance 52 weeks Not Offered Offered 21 Days Monthly or Yearly
Over Fifty Landlord Building and Contents Insurance 12 months Elective Not Offered 14 Days Monthly or Yearly


In addition to free comparison tools, you can also use an online landlord insurance calculator in Australia to determine the exact value of your property and belongings.



5. How To Find The Best Landlord Insurance In Australia?


The right insurance depends on the individual circumstances and the level of required coverage. 


Based on your needs, you can choose from a range of landlord insurance policies such as building cover, contents cover, and building and contents cover.


In addition to the basic plan, you can opt for optional covers like the rent default cover to enhance your coverage. Here we have listed top insurers that offer the different variants of landlord’s insurance: 



AAMI Landlord Insurance


This landlord Insurance offers comprehensive coverage for your investment property. It also offers an elective Complete Replacement and Tenant Protection Cover. 


New policyholders get an additional benefit of up to $50 when they buy a policy online.


You can make claims for the following events if they cause damage or loss to your home and contents:


  • Flood

  • Storm

  • Fire

  • Tremor

  • Lightning

  • Theft

  • Explosion

  • Damage due to an animal

  • Liquid leakage

  • Vandalism

  • Communal Riots


Read the policy disclosure statement to get a complete idea of applicable restrictions and exclusions under the policy.



NRMA Landlord Insurance


Do you want to know what landlord insurance is in NSW and where you can find the best landlord insurance?


NRMA Insurance (National Roads and Motorists Association Limited) has 90 years of experience protecting landlords for their diverse needs, including car, motorcycle, travel, business, and home insurance. 


Besides NSW, the company also offers QLD, ACT, SA, WA, TAS, and NT services.



RACQ Landlord Insurance


RACQ offers home insurance to residents of Northern NSW and Queensland. There are three different types of insurance:


  • Building Insurance: Covers only the building


  • Contents Insurance: Covers belongings on the property 


  • Combined Contents and Home Insurance Plan: Cover the building and the contents within the leased property.



6. What Contents Does A Landlord Need To Cover?


Landlords are responsible for safeguarding the rented property against insurable events that can damage their investment. 


Here is the list of contents that the insurance should cover against any loss or damage:


  • Furniture

  • Fixtures and fittings

  • Electrical appliances such as air conditioning, heater, geyser, dishwasher, and stove

  • Blinds and curtains 

  • Carpets and rugs

  • Utensils

  • Detachable light fittings


In addition to regular repairs, maintenance, and safety installations, ensure the premises stay in good condition.



7. Landlord Insurance Vs Home Insurance


The main difference between home and landlord insurance is that the latter also covers legal claims for rental loss and additional legal costs. It is to execute a legal process to evict a tenant if they default on rent payments.



8. Is Landlord Insurance Cover Tax Deductible?


In some cases, it is, as building property contents insurance comes under investment management or maintenance. They can be tax-deductible.


You can also claim landlord insurance premiums for your tenanted property during your past occupation.


According to the Australian Taxation Office, the following expenses on a rented property are tax-deductible, and a property owner can claim:


  • Marketing for your apartment to find tenants 

  • Insurance premiums 

  • Property management fees 

  • Real estate agent commissions

  • Water bills

  • Pest control charges

  • Body corporate fees and Council rates

  • Unpaid Gas and Electricity bills by the tenant

  • Bank fees 

  • Loan charges 

  • Property Repair costs

  • Repayment of interest on investment home loan

  • Legal fees to take court action against a rent-defaulting tenant

  • Defend a damage claim by a third party for any injury at your rental property.

  • Expenses for gardening, cleaning, and lawn trimming 

  • Land tax

  • Travel expenses for inspection and collection of rent


You should consult a tax specialist to understand claimable expenses on your leased property.



9. How Is The Cost Of Landlord Insurance Computed?


There is no fixed premium for all landlord insurance plans. The insurance cost can be different for everyone as the policy premiums depend on a range of factors that are unique to each person.


Here are the various parameters that determine how much you need to pay for the insurance:


  • How much cover or ‘sum insured’ do you need for your rental property? 
  • Additional inclusions such as elective covers like “rent default cover” can increase your policy premiums.

  • The excess you choose 

  • Have you made any claims under your policy in the past? 

  • Where is your tenanted property located? (You may be charged more if your property is susceptible to natural hazards such as floods, tornados, storms, bushfires, erosion, etc.

  • The crime rate of your suburb

  • Untenanted periods

  • Specific features of your leased property

  • The property type (premiums are more for houses than townhouses and units)

  • Your property’s value and the value of contents present within 

  • The structural integrity of your rental property (buildings made from robust materials are safer and cheaper to insure)

  • How safe is your property? Suppose your property has bolted doors, fire alarms, and security cameras. In that case, it is less prone to theft and attracts lower premiums.


It is best to get a quote from three to four reputed insurers to compare prices.



10. What Is The Process To Claim Landlord Insurance?


Having decided to claim your policy, you need to first contact your insurance provider via phone or online. Provide your insurance policy number and mention your concern.


They will ask you to provide a few details about the claim. When filing a claim, submit the following documents to support your claim request.


  • Claim form downloaded from your insurer’s website

  • Copies of the rental agreement

  • Copies of messages or letters shared between you and your tenant, including notices

  • Maintenance or repair quotes 

  • Before and after photos ready of your rental property

  • Property examination reports

  • In cases of a burglary that has caused substantial property damage, you must contact the emergency service or police.


Based on how sooner you contact the insurer and provide them with all the necessary documents, your claim can settle within a few days to a couple of weeks.



11. What Things To Consider When Selecting Landlord Insurance?


The right policy cover depends on your priorities as a property owner and the type of property you plan to lease. 


Here we have discussed a few things when you plan to take out a new landlord insurance policy:


  • Understand that insurance premiums are decided based on the building structure. It implies that the insurance premiums for units and apartments differ from houses.


  • Consider any enhancements/additions you have made within the apartment that may have increased its value compared to the original insurance evaluation. In such a case, you should look for additional coverage.


  • Calculate the monetary value of a specific part of your rented home that is prone to damage when you lease it.


  • The next thing to consider is that your insurance premium could be tax-deductible as per the Australian Taxation Office. In other words, you can claim building, public liability insurance, and contents in your tax return under property management and maintenance expenses.


  • You can adjust (increase or decrease) your premium by choosing a lower or higher excess on your insurance policy. Increasing the insurance excess may require you to pay more out-of-your-pocket when making a claim but would reduce your premiums and vice versa. 


You need to understand how much excess you can afford throughout the policy term without experiencing any financial burden. 


The key is determining what property features are worth protecting and whether you want to enhance your premium to cover their value. It will make it easier to strike a healthy balance between excess and premium.



12. Conclusion


Claims on landlord and home insurance aren’t uncommon in Australia. The potential pay-outs you receive under your landlord insurance policy can immensely offset the expenses and could save you from potentially disastrous circumstances.


However, a property investor should remember that each landlord’s policy differs. Therefore, they should understand their needs and compare policy features across different insurers to get the best protection.


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