Finder makes money from featured partners, but editorial opinions are our own.

Rent default

Rent default is different to loss of rent but both could be worth including in your landlord insurance policy.

What you need to know

  • Rent default covers you if your tenant stops paying for rent which is not the same as loss of rent.
  • Rent default can protect you if your tenant stops paying the rent; loss of rent helps if your property becomes uninhabitable.
  • You will generally need to pay extra to get rent default included in your cover.

What's the difference between rent default and loss of rent?

tenant

Rent default

Rent default, sometimes called tenant default, protects you if your tenant stops paying the rent and is in breach of a tenancy agreement. For example, if your tenant's income is stopped or reduced due to an unforeseen event such as losing their job or becoming ill, rent default can pay you a rental income. It can also cover associated legal expenses.

flooded house

Loss of rent

Loss of rent, on the other hand, can pay you a rental income if your property becomes uninhabitable because of an insured event, like a fire, storm or rainwater damage. You will only be covered for the period you were unable to charge rent because the tenant was unable to live in your property. The insurance provider will usually decide if your property is uninhabitable.

Typically, insurers will cover you for loss of rent if your rental becomes uninhabitable – for example, due to a bushfire or serious storm. However, most insurers will not automatically cover you for rental or tenant default (e.g. if a tenant stops paying you rent). Instead, you will need to add this option on to your policy. In the current cost of living crisis, there's a risk tenants may be unable to pay rent, so it's definitely worth considering.

Choose a policy with rent default insurance available

Remember, rent default cover is also called tenant default.

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 20,000 Qantas Points with every Qantas Landlord Insurance policy you take out by 22 April. T&Cs and exclusions apply.
loading

Finder survey: How many Australians in each state own their own home?

Response
I live in a home I own70.98%
I live in a home I rent23.99%
I am living with my parents5.03%
Source: Finder survey by Pure Profile of 1113 Australians, December 2023

How does rent default work?

Rent default can pay you a rental income if your tenant stops paying rent or leaves without giving notice while there's a rental agreement in place.

To be covered, you and the tenant must have a signed written lease agreement that has been in place for a number of weeks (often around 4) before the loss occurs. You can't get rent default cover for casual lets.

In most cases, there will be a cap on how long you can receive rental payments. For example, Budget Direct, CHU, Youi and QBE will pay your rent for up to 15 weeks.

You may also need to pay an additional excess (a payment towards the cost of a claim, often in the region of $400). The amount should be outlined to you by your insurer when you take out cover.

You can't claim twice
An insurer probably won't cover you if you have previously been paid a claim for rent default under the same lease agreement.

Who offers rent default insurance?

We looked at all the landlord insurers available on Finder to see who offers rent default insurance.

BrandIncludedReceive rent default for
Budget DirectOptional add-onUp to 15 weeks
YouiOptional add-onUp to 15 weeks
QBEOptional add-on$15,000 or up to 15 weeks
QantasOptional add-onUp to 15 weeks
Australian SeniorsOptional add-onThe lesser of up to 6 weeks of rent or $2,500

The bottom line

Rent default isn't usually automatically covered by landlord insurers, so you'll need to pay a little extra if you want it included. It's the same situation with loss of rent. If you rely on your rental income in any way, for example to pay bills or for other living expenses, then it's probably worth getting. You can compare more landlord insurance policies here.

More guides on Finder

Ask a Question

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our 1. Terms Of Service and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site