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Landlord insurance vs home insurance

Normal home insurance can’t protect you from a problem tenant or loss of rent – but landlord insurance can.

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.

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

Landlord

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.

House

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.

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.

Type of damage or lossLandlord insuranceHome insurance
Fire
Storm
Flood
Water
Impact
Legal liability
Loss of rental income
Legal expenses to evict a tenant
Replacement locks after evicting a tenant
Malicious damage by tenant

Renting out a property? Get covered with landlord insurance

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
Optional
21 days
Annually
Save 30% on your first year's premium when you buy a combined home and contents policy online. 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.
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 30,000 Qantas Points with every Qantas Landlord Insurance policy you take out by 28 May. T&Cs and exclusions apply.
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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.
  • 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.

FAQs about landlord insurance vs home insurance

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8 Responses

    Default Gravatar
    PatAugust 1, 2023

    I am living in a property owned by a family member and pay the mortgage instalments in lieu of rent. Is it necessary for my family to have landlords insurance on the property or can they just have household buildings insurance as this would be cheaper?

      AvatarFinder
      SarahSeptember 4, 2023Finder

      Hi Pat,

      It depends on which risks your family member would like to protect. For instance, if something happens to the property (such as damage) and you need to move out, and you therefore need to pay for accomodation elsewhere and wish to stop paying rent, landlords insurance can provide them with coverage for the missed rental payments. It’s a personal decision so it’s best to weigh up the cost of the different policies against the potential risks and benefits.

      Hope this helps!

    Default Gravatar
    MelJune 23, 2020

    Hi
    We originally took out landlords insurance but now have family members living in the home and not paying rent. Are we still covered by our current Landlord Insurance?

      AvatarFinder
      AlexandraJune 23, 2020Finder

      Hi Mel,

      If the members aren’t paying rent then you might not be covered for the landlord insurance part of your policy. If you decide that you no longer need the additional extras under landlord insurance like cover for loss of rent or damage made by the tenants, then you may be able to simply change over to a building insurance policy and list it under ‘Owner occupied’ as you have family members living there. This might be slightly cheaper than your current landlord insurance policy.

      Hope this helps!

      Best,
      Alexandra

    Default Gravatar
    VivJune 14, 2020

    Can a building owner pass on a share of the building insurance cost to the tenant or lessee?

      AvatarFinder
      AlexandraJune 15, 2020Finder

      Hi Viv,

      It’s generally the landlord’s responsibility to take out building insurance and if the tenant would like cover for their own things, they can take out a renters insurance policy that will cover their contents and personal possessions.

      If you’re having difficulty with a dispute, I’d suggest getting in touch with the Australian Financial Complaints Authority (AFCA) that can help you reach a resolution with the other party.

      Hope this helps!

      Best,
      Alexandra

    Default Gravatar
    GailApril 21, 2019

    Please advise which companies can offer house and contents insurance for airBnB properties. I keep getting directed to various insurers but but as I finish each quote submission I am advised that they do not cover for such. This is becoming very frustrating and time consuming.

      AvatarFinder
      MaiApril 22, 2019Finder

      Hi Gail,

      Thank you for reaching out to Finder.

      For Airbnb properties, you’ll need to look for a policy like a landlord insurance. They will cover you for things like tenants damaging your property, as well as your home itself.

      You can try landlord insurance from BudgetDirect, Youi, and Virgin Money. You can request quotes from our holiday home insurance page. The page also discusses Airbnb Host Guarantee which you may need to check when comparing your options.

      Hope this helps! 😊

      Kind Regards,
      Mai

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