Landlord building cover protects the physical structure of your property if it's damaged by an insured event like a natural disaster, fire or your tenant. The following is all considered "the building":
The building itself (e.g. bricks and mortar)
Electrical cables and plumbing system
Other permanent structures (e.g. built-in swimming pools and air conditioning)
If you have a furnished or partially furnished property, then you should also consider getting landlord contents insurance. This covers the items you own and keep at your rental.
- You want a financial safeguard for your investment property.
- You live in an area where natural disasters are common.
- You rely on your property to earn an income.
Possibly not, if
- You own a unit in an apartment block since your strata levies should cover the building insurance.
Damage from unexpected events
This includes damage from fires (including bushfires) storms, rainwater, floods, escaped water and lightning. Building cover also commonly includes mortgage discharge costs.
Damage caused by tenants
This includes damage caused by visitors, pets and unknown persons. This can protect your property against accidental loss or damage, tenant damage and vandalism or theft.
Loss of rent
If your building is damaged by an insured event and becomes uninhabitable, landlord building insurance can cover your loss of rent for a specific time – often up to a year. It can also cover rent default (if your tenant is unexpectedly unable to pay you rent).
Commonly referred to as legal liability, this covers you for death or bodily injury to other people as well as for damage to other people's property, usually up to $20 or $30 million.
Landlord contents insurance doesn't cover the following:
- Regular maintenance
- A poorly maintained property
- Contents (e.g. the items you keep at the property)
- Mould (unless the mould was covered by an insured event)
- Roots of trees, shrubs and plants
- Building defects
- Wear and tear
- Damage caused by vermin, insects or rodents
- Damage caused by ground movement
- Damage caused by movement of the sea
- Damage caused by a power surge
- Damage related to war
Insurers are unlikely to cover you for bushfires, storms, floods or tsunamis in the first 72 hours of your policy.