How much does landlord insurance cost?

You could save over $1,500 a year simply by comparing landlord insurance policies.

Investing in rental property is a great way to bring in some extra income, build equity or both, but it won’t do you any good if you don’t protect your investment. Landlord insurance can help by protecting you from natural disasters, problem tenants and more.

The cost of insurance can differ for every landlord based on the type of property, the sum you want to insure it for and where it is located. From our research, we found that landlord insurance costs $208 a month on average, but keep in mind that this is for a home that is worth $1,000,000, so your costs could be cheaper or more expensive, depending on how much your home is worth.

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Landlord Insurance
Landlord Insurance
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  • 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
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Home and Landlord Insurance
Home and Landlord Insurance
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  • 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
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Landlord Insurance
Landlord Insurance
Cover for investment property from fire, theft and numerous weather events.
  • Cover for loss or damage by theft, attempted theft
  • Storm, including lightning, wind, hail and snow cover
  • Cover for burnout of electric motors
  • Cover for loss of rent for insured events
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How much does landlord insurance cost?

The cost of landlord insurance can vary based on where the property is located, the type of property you are renting (such as a house or a unit) and how secure the building is. Even your choice of insurer can have a dramatic effect on how much you pay.

The following table shows just how dramatically your landlord insurance costs can differ from one insurer to the next.

These prices are based on the same 3-bedroom house in NSW, but that doesn’t mean the more expensive insurers in this example will be the most expensive one for your particular property. Each property is different and each insurer has a different way of calculating risk.

Monthly Yearly

Budget Direct

$155.39 $1,574.54

Allianz

$201.65 $2,179.88
virgin money logo

Virgin

$158.48 $1,609.78
Westpac car insurance

Westpac

$190.65 $2,287.84

GIO

$253.70 $2,718.28

Coles

$276.60 $3,234.76

Woolworths

$194.85 $2,152.13
Suncorp logo new

Suncorp

$269.88 $2,682.11

How much is that as a percentage of your rental income?

Using the example from the table, you can get landlord insurance on a 3-bedroom house in Sydney, NSW for as little as $155.39 per month.

If you fetched $1,000 per week in rent, as per the example using the 3-bedroom home in Baulkham Hills, that would equal $4,345 per month in rental income.

So that means you would be paying 6.5% of your rental income on landlord insurance:

$155.39 ➗ $4,345 〓 3.6%

That’s a small price to pay considering how much you stand to lose if a fire destroys your entire home.

What can a landlord claim for?

As a landlord, you have many of the same risks as other homeowners, plus a few more related to your tenants and your income. Landlord insurance can protect you for all of it. Here are some of the most common reasons you might claim, according to speciality landlord insurer, Terri Scheer:

  1. Loss of rental income. According to Terri Scheer, more than one third of all claims occur when tenants default on their rent. That’s right, landlord insurance can reimburse you if your tenant doesn’t pay!
  2. Damage to your building or contents. This can include accidental damage like the tenant banging up your walls while moving a couch or malicious damage like a tenant that vandalises your property to get back at you for something. Not all policies cover accidents, but some will for an extra charge.
  3. Water damage. This refers to water that escapes from burst or leaking pipes or from leaking appliances. If the tenant caused the leak due to an accident, you may not be covered unless you have additional accident cover.
  4. A tenant’s death. A tenant’s passing could create a host of expenses for you, including finding a place for the tenant's property and losing out on rent while the person’s affairs are put in order. Landlord insurance can help you with all of it.

Picture: Unsplash

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