Landlord insurance vs home insurance
Normal home insurance can’t protect you from a problem tenant or loss of rent – but landlord insurance can.
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What's the difference between landlord insurance and home 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 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 loss||Landlord insurance||Home insurance|
|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
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
Brands still offering landlord insurance
As of 15 October 2021, the following brands are still offering new landlord insurance policies. All existing policies should be respected, but it's best to check directly with your insurer.
|Provider||Are they still offering landlord insurance?||Are they offering tenant default options?||Apply|
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