A Guide To Landlord Insurance

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Renting out a property? Protect your investment and compare landlord insurance policies today.

When you’ve worked long and hard to purchase an investment property, the last thing you’d want is for your money to be wasted. However, damage caused by fire, theft, storms and even bad tenants can lead to costly repair and leave you significantly out of pocket.

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Details Features
Landlord Insurance
Landlord Insurance
Protect your rental property from financial loss from fire, theft, storm or damage from tenants. Save 15% when you purchase Smart Home or Smart Contents online.
  • Tenant default cover if tenant stops paying rent
  • Optional cover for theft or malicious damage by tenant
  • Cover for fire, storm or rainwater damage
  • Cover for loss of rent if home is not fit to live in following an insured event
Go to site More info
Landlord Insurance
Landlord Insurance
Cover for investment property from fire, theft and numerous weather events. Cover can be tailored further with additional options.
  • Cover for loss or damage by theft, attempted theft
  • Storm, including lightning, wind, hail and snow cover
  • Optional burnout of electric motors cover
  • Optional accidental damage cover up to $5,000
Go to site More info
Home and Landlord Insurance
Home and Landlord Insurance
Add optional Landlord cover to protect against damage caused by tenants. Save 15% and receive 5,000 Velocity Frequent Flyer Points when you buy new Virgin Home Insurance Price Saver online. T&Cs apply.
  • Cover for loss of rental income
  • Cover for loss or damage to fixtures and fittings
  • 21 day money back guarantee if a claim has not been made
Go to site More info
Landlord Insurance
Landlord Insurance
Receive standard protection for your home for a number of benefits including.Provides optional protection in case of Tenant Default and Theft & Malicious Damage by Tenants.
  • Cover for loss of rent if home not fit to live in following insured event
  • Cover for loss
  • Optional cover for tenant default
  • Optional cover for theft and malicious damage by tenants or visitors
Go to site More info

So, is landlord insurance really worth it?

This type of cover is suitable for people who are renting out a house, unit or flat they own. Every landlord would be well aware that renting a property out to tenants is not without its risks, so it’s important that you take out appropriate protection to guarantee your own peace of mind.

Landlord insurance protects you from the common risks that properties encounter, as well as the risks that arise directly as a result of having tenants. All of these risks can end up being incredibly costly if you don’t have the best* landlord insurance policy for you in place.

What should the best* landlord insurance policies cover?

No two insurance policies are the same. Some landlord insurance cover is designed to be taken out in unison with your home and contents insurance. Other policies are more comprehensive and do not require this. There are some general ground rules to look out for. The best* landlord insurance is subjective to your needs, although the policy you choose should offer adequate coverage for each type of situation.

What am I covered for?
In most cases, landlord insurance covers the following:

  • accidental glass breakage  
  • loss or damage caused by earthquakes
  • loss or damage caused by fire
  • loss or damage caused by lightning
  • loss and damage caused by storms, rainwater and run-off
  • loss or damage caused by the impact of road vehicles, rail vehicles, watercraft, external aerials, animals, falling trees and aircraft
  • tsunami 
  • explosion
  • liability, including for a claim against you by the tenant, and for property damage and injury claims lodged by a third party
  • malicious acts, vandalism and intentional damage to the property
  • riot or civil commotion
  • theft and burglary
  • water and other liquid damage 
  • loss of rent if the tenant defaults on their payments

What aren't I covered for?
Regardless of whether you purchase a cheap or expensive landlord insurance policy, there are certain situations and events which your policy will typically not cover. These include loss, damage or injury arising from:

  • tenant neglect, poor housekeeping or unhygienic living habits
  • wear and tear, rust and corrosion
  • mould
  • depreciation
  • subsidence or landslide
  • extreme temperatures
  • vermin or insects
  • tree lopping
  • tree roots
  • the lawful seizure of your rental property
  • any act of terrorism
  • any act or intentional omission 
  • mechanical, structural or electrical failure of an item
  • business interruption costs
  • settling, shrinkage or expansion of buildings
  • you breaching the rental agreement
  • your failure to maintain your rental property in good condition
  • faulty design or workmanship that you knew about
  • repairs carried out by the tenant

What's the difference between landlord insurance and building insurance?

Read our full guide on building insurance and still a bit confused? That's okay. There are a few core differences between landlord insurance and building insurance. This following table should help you understand them.

Landlord Insurance
Building Insurance
Explosions (caused by gas leaks)Explosions (caused by gas leaks)
Storm damage: including lightning, earthquakes and floodStorm damage: including lightning, earthquakes and flood
Vehicle collisions with the buildingVehicle collisions with the building
Vandalism by tenants and their guests Vandalism
Theft by tenants and their guests Water damage
Renter default
Legal expenses required to evict a tenant
 Contents of landlord

Landlord_Keys

Reading the fine print - what should I watch out for?

It's crucial to check all the terms and conditions of your policy. Read carefully over what is covered and what isn't covered as they vary from policy to policy. There are a few terms in most PDS' that landlords will need to meet in order to make a claim. Ensure you have:

  • A formal lease. A formal lease agreement must exist between you and your tenants that specifies the occupation dates and amounts payable.
  • Detailed reports. Complete entry and exit reports with supporting photographs will protect you if any damage arises.
  • Regularly conducted inspections. Landlords should have a written record of the outcome of each inspection in case the insurers request it.
  • Legal expenses. If you lodge a claim for rent default or tenant theft you are able to cover the cost of legal expenses for recovering rental income owed to you.
  • Strata title mortgage protection. This is useful for properties that are units. If your insured building is part of a strata title development, has not been adequately insured by the strata and is totally destroyed by an insured event, your policy will cover your remaining mortgage.
  • Landlord workers’ compensation. This covers your liability if you employ a person to do work on your rental property and they are injured whilst working for you.
  • Pets. Damage caused by animals is a common exclusion in insurance policies. It's best to ensure your tenants do not have pets, or alternatively, actively search for a policy that covers pets.

Read between the lines

Ensure your policy covers you for:

  • Malicious damage. Most policies will cover you for malicious damage caused to the property by your tenants and their guests, but you may have to pay an extra premium for this feature.
  • Fixtures and fittings. Check exactly what fixtures and fittings are included in your property cover. Most policies will generally offer protection for damage to things like pipes and cables, fixed appliances, sheds, exterior blinds and awnings and in-ground swimming pools.
  • Possessions. If you choose a landlord policy that also covers some of the contents of the property, look closely at the fine print to see what is included in your policy. Note the coverage of carpets, blinds, furnishings, and light fittings.
  • Tenant default. The best* landlord insurance policies will cover you when tenants default on their rent. This may happen because of a tenant’s financial difficulties, if a tenant is evicted due to a court order or if a tenant dies unexpectedly.
  • Theft. Surprisingly, theft by tenants is not always covered. Be sure to read individual policies in detail.

How much does it cost?

Whilst there is no price set in stone, the cost of landlord insurance can be impacted by multiple factors. Some of these include:

  • what type of property it is
  • where you live 
  • the value of your building and contents
  • the level of security your property has
  • if it surrounded by any tall trees
  • the age of the insured
  • the flood risk of your property
  • the construction materials of your rental property and its roof
  • the year your rental property was built

One way to calculate how much insurance will cost you is to get quotes from as many different providers as possible.

How does landlord insurance 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 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. Where you do have some form of insurance against damage caused by pets, it’s typically restricted to cover for specific ornamental items that have been knocked over by pets, or a limited amount of cover for damage caused by pets that were kept on the premises without your knowledge, when specifically prohibited under the tenancy agreement.

Here are just some insurers that offer forms of pet insurance:

Pet damage that can be coveredPet damage not coveredGet quote
Budget DirectInsured events caused by resident pet, except accidental damage and most impact damage.
Impact damage caused by resident pet to glass, crystal and ceramic items, except certain items like laptop or phone screens.
Accidental damage caused by animal pecking, chewing, clawing, biting, urination or defecation.Get quote
YouiVet fees for accidental injuries to a household cat or dog, up to $1,000 per year, as an optional extra with contents insurance.
Damage to household furnishings such as white goods, carpets and blinds, when caused by fire related pet damage, with optional landlord furnishings cover.
No cover for any damage caused by resident pets, except when fire related.Get quote
Virgin MoneyInsured events caused by resident pets, such as a fire inadvertently caused by an animal.Impact damage to crystal, glass and ceramic items, such as vases, caused by pets, with some exceptions such as laptop and phone screens.No impact damage cover for damage caused by any animal, whether or not a pet, except for the specified crystal, glass and ceramic items.Get quote
DodoImpact damage caused by resident pets to glass, crystal and ceramic items, except certain items like laptop or phone screens.No cover for impact damage caused by resident pets, no cover for any damage caused by animal pecking, chewing, clawing, biting, urination or defecation.Get quote

Some other questions to consider:

Landlord insurance generally covers events that lead to the loss of rental income, damage, or theft in your property. On the other hand, building insurance protects your against damage to the property’s structure. For more information on building insurance, read our comprehensive guide.

There is no legal obligation for landlord to take out insurance. However, some mortgage lenders may require you to take out insurance before you rent your investment.

In most circumstances, landlord insurance is tax deductible.

If you try and get insurance only when you encounter a problem, you're likely to get rejected. For this reason, it's best to take out landlord insurance before your tenant moves in.

There are some policies that won't cover legal costs if you end up in court against a tenant. Be sure to read your PDS in detail.

Some policies won't pay you if you're in between tenants. If there's a chance that you will have an extended vacancy in your property it's best to look for insurance that covers this. Find a policy that covers you regardless of whether a tenant is occupying the property.

If a landlord moves back into the proprety, the landlord insurance cover is no longer valid. The landlord should inform the insurer as soon as possible.


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* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

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6 Responses to A Guide To Landlord Insurance

  1. Default Gravatar
    mike | August 30, 2016

    landlord insurance with no agent

    • Staff
      Richard | August 30, 2016

      Hi Mike,

      Thanks for getting in touch. The two policies in the table above are direct landlord insurance products, meaning that they can be purchased online without the aid of an agent.

      Cheers,
      Richard

  2. Default Gravatar
    sarina | August 1, 2016

    I need quotes for landlords Insurance

    • Staff
      Richard | August 2, 2016

      Hi Sarina,

      Thanks for your question. finder.com.au is a comparison site and does not currently have the facilities in place to provide quotes for landlords insurance. However, if you would like to compare the products available from the insurance brands in our panel, please consult the comparison table at the top of the page.

      I hope this was helpful,
      Richard

  3. Default Gravatar
    Jo | June 15, 2015

    I currently have landlords insurance for contents only, can you provide me some quotes before I renew?
    Thanks
    Jo

    • Staff
      Richard | June 16, 2015

      Hi Jo,

      Thanks for your question.finder.com.au is a comparison service. If you would like to compare the options on offer through the providers in our panel, please consult the table above.

      I hope this was helpful,
      Richard

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