Landlord insurance vs home insurance

Home and contents insurance protects your home against damage or accidents. Landlord insurance covers you for the same things, but also covers you for loss of rent and malicious damage by your tentants. If you're a landlord, it's a no-brainer.

Understanding the difference between insurance terms is the first step in protecting your property. Many Australians use "home insurance" and "building insurance" to mean the same thing, but there are important differences. Home insurance usually refers to a policy that covers both the building and the items inside. Building insurance covers only the physical structure of the home. Knowing the difference helps you avoid paying for cover you do not need or leaving your assets unprotected (Source: Verified Data & Insights).

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

Landlord insurance

Landlord insurance is a specialist form of home insurance that covers everything normal home insurance does – plus a range of extra protections for problems unique to landlords. This can include theft and intentional damage by the tenant, loss of rent when your place is damaged or if the tenant can't pay and legal expenses and replacement locks if you have to evict a tenant.

Home insurance

Home insurance covers you if a storm, fire, theft or other insured event damages or destroys your home or its contents. You can typically choose two forms of protection: protection for your home (building insurance) and protection for your belongings (contents insurance). It's a step down from landlord insurance because that also protects your business; specifically, any issues your tenants may cause.

While this article highlights the landlord perspective, comprehensive insurance guidance is equally vital for standard homeowners and renters. Homeowners typically require building insurance to satisfy mortgage requirements, whereas renters only need contents insurance to protect their personal belongings, as the landlord is responsible for the structure itself (Source: Verified Data & Insights).

"Getting landlord insurance is crucial for the protection of your investment. You'll most likely be covered for damage to the property by the tenant and also if the tenant defaults on rent. Either damage or default could really hurt the wallet if you're not covered. Make sure they're included in your policy before you sign up. "

Matt Corke

Finder crew member

What will landlord insurance protect you for that home insurance won't?

The tenant protection part of landlord insurance gives you additional protection against the following:

• Theft and intentional damage by the tenant
• Loss of rent when your place is damaged
• Loss of rent if the tenant can't pay
• Your legal expenses if you have to evict a tenant
• Replacement locks if you have to evict a tenant

Features included in landlord insurance vs home insurance

Here's a more detailed breakdown of the similarities and differences between landlord insurance and home insurance.

Renting out a property? Get covered with landlord insurance

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Finder Score	Tenant Default and Damage	Loss of Rent	Accidental Damage	Sum Insured Safeguard	Cooling-off Period
Promoted Finder Score 9.9 Excellent QBE Landlord Home & Contents Insurance	Finder Score 9.9 Excellent	Optional	The lesser of: Up to 24 months of lost rent, or 20% of your sum insured amount			21 days	Get 10% off for buying a combined policy, plus an additional 10% in the first year for signing up online. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Promoted Finder Score 8.5 Great Budget Direct Landlord Home & Contents Insurance	Finder Score 8.5 Great	Optional	10% of the sum insured amount of your property	Optional	Optional	21 days	Save 30% on your first year's premium when you buy a combined home and contents policy online. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Promoted Finder Score 8.7 Great Youi Landlord Building and Contents Insurance	Finder Score 8.7 Great	Optional	The reasonable rental amount for up to 12 months			20 days	Cover for investment property from fire, theft and numerous weather events.	Get a quote View details Compare product selection Compare	loading
Finder Score 6.7 Standard Seniors Landlords Building & Contents Insurance	Finder Score 6.7 Standard		The lesser of: 12 months rent, or 10% of your building sum insured, or the lost rent			14 days	Save 5% when you buy a combined building and contents policy. The discount will apply to the first 12 months of your Seniors Landlords Insurance policy. The discount will be reapplied for 12 months each time your Seniors Landlords Insurance policy is renewed. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Finder Score 9.9 Excellent QBE Landlord Contents Insurance	Finder Score 9.9 Excellent	Optional	The lesser of: Up to 24 months of lost rent, or 20% of your contents sum insured			21 days	Save 10% on your Landlord Contents Insurance policy in the first year for signing up online. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Finder Score 9.9 Excellent QBE Landlord Home Insurance	Finder Score 9.9 Excellent	Optional	The lesser of: Up to 24 months of lost rent, or 20% of your sum insured amount			21 days	Save 10% on your Landlord Building Insurance policy in the first year for signing up online. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Finder Score 6.8 Standard Seniors Landlords Building Insurance	Finder Score 6.8 Standard		The lesser of: 12 months rent, or 10% of your building sum insured, or the lost rent			14 days	Save 5% when you buy a combined building and contents policy. The discount will apply to the first 12 months of your Seniors Landlords Insurance policy. The discount will be reapplied for 12 months each time your Seniors Landlords Insurance policy is renewed. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Finder Score 8.7 Great Youi Landlord Building Insurance	Finder Score 8.7 Great	Optional	10% of the buildings sum insured			20 days	Get a quote View details Compare product selection Compare	loading
Finder Score 8.4 Great Budget Direct Landlord Contents Insurance	Finder Score 8.4 Great	Optional	No	Optional		21 days	Save 15% on your first year's premium when you buy a contents insurance policy online. T&Cs apply.	Get a quote View details Compare product selection Compare	loading
Finder Score 8 Great Budget Direct Landlord Building Insurance	Finder Score 8 Great	Optional	10% of the sum insured amount of your property	Optional	Optional	21 days	Save 15% on your first year's premium when you buy a home only policy online. T&Cs apply.	Get a quote View details Compare product selection Compare	loading

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Finder Score for landlord insurance

Finder Score assesses more than 40 home and contents landlord insurance products for their price and features, assigning each product a score out of 10.

Read the full methodology

How to choose the right landlord insurance

As a landlord, there are three areas you need to protect: your building, the belongings that you keep in the building and your rental income. Here's how to make sure you have the right amount of cover:

• Decide what needs to be protected. If you don't keep much inside the property or if losing the contents won't break the bank, you may be able to get away without landlord contents insurance. If you are renting to a family member and trust them not to burn the place down, you may also be able to do without landlord insurance. Similarly, if you're living in an apartment, you might not need building insurance as strata has your back. But for the most part, it would be shortsighted to go without either building insurance or landlord protection because these can save your entire investment.
• Decide how much to insure the building for. When you're insuring the building, it makes sense to insure it for its entire value, otherwise you would only get a partial payout if it's destroyed. This could end up costing you hundreds of thousands of dollars. You can also add additional cover that would enable you to rebuild your property to the same specs as the old one – even if the cost of building materials has risen causing the costs to blow out.

  A strategic explanation of rebuild costs versus market value is essential to prevent consumer underinsurance. Your "sum insured" should reflect the actual cost to rebuild the structure from scratch, including debris removal and professional fees, rather than the price you could sell the property for on the open market. Market value includes the land, which does not need to be insured, whereas rebuild costs fluctuate based on labour and material prices (Source: Verified Data & Insights).

• Read and re-read the exclusions in your policy documents. These are the situations where you won't be covered. For example, you often won't be covered for floods unless you buy additional flood protection. If you're not familiar with your policy's exclusions, it can be easy to overlook a key piece of information like this.

  In the context of residential insurance policies, "structure" is specifically defined to include more than just the main house. It generally encompasses permanent outbuildings such as sheds, garages, carports and even fences or paved driveways. Understanding these specific definitions ensures you have selected a policy that covers the entire footprint of your investment (Source: Verified Data & Insights).

FAQs about landlord insurance vs home insurance

• Is landlord insurance compulsory in Australia?

  No, landlord insurance is not legally mandatory in Australia. However, it is highly recommended for anyone renting out a property to protect their investment from financial risks unique to tenants and rental properties.

• Is landlord insurance tax deductible?

  Generally, yes, landlord insurance premiums are considered a legitimate expense related to generating rental income and are therefore usually tax deductible in Australia. You should always consult a qualified tax advisor or the Australian Taxation Office for advice specific to your circumstances.

• Does landlord insurance cover damage caused by tenants' pets?

  Some landlord insurance policies offer cover for damage caused by tenants' pets either as a standard inclusion or as an optional extra you can add to your policy. It is important to check the specific Product Disclosure Statement PDS of your chosen policy to confirm this cover.

• What is legal liability cover within landlord insurance?

  Legal liability cover in landlord insurance protects you financially if a tenant or visitor is accidentally injured or suffers property damage on your rental property and you are found legally responsible. It helps cover legal costs and compensation payments.

• Can I get landlord insurance for a short term rental property like Airbnb?

  Many standard landlord insurance policies have exclusions for short term rentals or commercial use. However, some insurers offer specialist landlord insurance policies designed specifically for properties rented out on short term platforms such as Airbnb or Stayz. It is crucial to disclose your rental arrangements to your insurer.

• Does landlord insurance cover periods when the property is vacant between tenants?

  Most landlord insurance policies provide cover for vacancy periods between tenants but often with specific conditions and time limits usually 60 or 90 days. If your property is vacant for an extended period you may need to notify your insurer or seek a specialised vacant property policy.

Terminology Comparison: "Home insurance" covers structure and items, "Building insurance" covers the structure only.

Coverage Specifics: Building insurance includes walls, roofs, pipes, cables and fixed fixtures like kitchen cupboards.

Guidance: Homeowners need building and contents, while renters generally only need contents insurance.

Valuation: Rebuild costs represent the price of reconstruction, whereas market value includes land and real estate demand.

Structure Definition: Residential policies define "structure" as the house plus permanent outbuildings, fences and driveways.

Written by

Gary Ross Hunter

Journalist

Gary Ross Hunter has over 6 years of expertise writing about insurance, including life, health, home, and car insurance. Having reviewed hundreds of product disclosure statements and published over 800 articles, he loves simplifying complex insurance topics for everyday readers. Gary has contributed to major outlets like Yahoo Finance, The Sydney Morning Herald, and news.com.au, and holds a Bachelor of Arts (Honours) in English Literature from the University of Glasgow, along with a Tier 2 General Advice certification, ensuring his work adheres to ASIC’s RG146 standards. See full bio

Gary Ross's expertise

Gary Ross has written 572 Finder guides across topics including:

• Health, home, life, car, pet and travel insurance
• Managing the cost of living

Co-written by

Alexandra Koster

Publisher

Alexandra Koster was Finder's publisher for car, home and pet insurance. She has a Tier 1 certification in General Insurance, as well as a Bachelor of Arts in Film and Cultural Studies from the University of Sydney. Her hobbies include reading Product Disclosure Statements and deciphering complicated insurance lingo to help people save on their insurance so that they can spend their money on better things – like dogs. See full bio