Landlord insurance can help protect Australian property owners from risks that come with renting out an investment property. Depending on the policy, it may cover tenant damage, loss of rent, legal liability and building damage
However, landlord insurance does not cover everything. Most policies exclude general wear and tear, poor maintenance, pre-existing damage, tenant belongings, building defects, pest damage, intentional damage by the landlord and events outside the policy terms.
This is why landlords should read the Product Disclosure Statement before choosing a landlord insurance policy. Each insurance provider sets its own inclusions, exclusions, limits and claim rules.
Reading these details can help property owners avoid gaps between what they expect to be covered and what the policy will pay for.
What Building Insurance and Home and Contents Insurance May Cover?
Landlord insurance cover is designed for rental property risks that standard home insurance may not cover. This can include tenant-related risks, building damage, legal liability and loss of rental income after an insured event.
The exact cover depends on the insurance provider, the Product Disclosure Statement and the policy options selected.
| Type of landlord insurance cover | What it may cover | Important note |
| Building insurance cover | Damage to the rental property from events such as fire, storm, vandalism or other insured events | Landlords are generally responsible for building insurance on their investment property |
| Landlord contents insurance | Items owned by the property owner, such as carpets, curtains, blinds, light fittings and some appliances | Tenant belongings are not covered |
| Loss of rent cover | Lost rental income if the property cannot be lived in after a covered incident | Some policies may cover loss of rent for a set period, such as up to 52 weeks |
| Rent default cover | Lost rent if the tenant stops paying rent | This may be optional cover and often requires a valid rental agreement |
| Legal liability cover | Claims linked to bodily injury or damage to someone else’s property at the rental property | Exclusions apply claims due to asbestos, deformation. |
| Optional cover | Extra protection such as flood cover, accidental damage or cover for short-term rentals | Optional cover varies between insurers |
What Does Landlord Insurance Not Cover?
Landlord insurance does not cover every cost, claim or issue linked to a rental property. Most policies exclude problems caused by age, neglect, poor upkeep, known defects or events outside the policy terms.
Common landlord insurance exclusions include:
- general wear and tear, such as faded carpets, worn floors and ageing roofs
- routine maintenance, repairs and slow damage over time
- pre-existing damage that was present before the policy started
- building defects, structural defects or faulty workmanship
- damage caused by pests, vermin or mould where it could have been prevented
- tenant belongings, such as furniture, clothing, electronics and personal items
- intentional damage caused by the landlord or property owner
- market rent changes, lower demand or reduced weekly rent
- some natural disasters, unless flood cover or other optional cover has been added
- short-term rentals or holiday rental use if the policy does not provide cover for them
Landlord insurance is not a maintenance contract. It protects against covered incidents listed in the insurance policy. It does not pay for every cost that comes with owning an investment property.
Wear and Tear, Maintenance and Pre-existing Damage
Landlord insurance generally excludes wear and tear, routine maintenance and pre-existing damage. These costs are usually part of owning and managing a rental property.
Common exclusions can include:
- faded carpets, worn paint and tired flooring
- ageing roofs, loose fixtures and old fittings
- appliances that stop working due to age
- damage that existed before the policy started
- mould, leaks or damage caused by delayed repairs
- issues caused by poor maintenance or neglect
Insurers expect landlords to keep the property in reasonable repair. To support a future claim, landlords should keep inspection records, repair invoices, maintenance receipts and dated photos.
Tenant Belongings and Renters Insurance
Landlord insurance does not cover tenant belongings. A landlord insurance policy protects the property owner’s insurable interests, not the tenant’s possessions, and that generally does not extend to the tenant’s possessions or someone else’s property kept at the rental.
This means tenants usually need their own renter’s insurance or contents insurance cover. This can help protect their furniture, clothing, electronics, jewelery and appliances they own.
Landlords should make this clear at the start of the rental agreement. It can help avoid confusion if damage, theft or an insured event affects the tenant’s possessions.
| Type of item | Who usually owns it? | Is it usually covered by the landlord’s insurance? |
| Carpets, curtains and blinds | Landlord | May be covered under landlord contents insurance |
| Light fittings and built-in appliances | Landlord | May be covered if included in the policy |
| Air conditioners supplied with the property | Landlord | May be covered, depending on the policy terms |
| Tenant furniture and electronics | Tenant | Not covered |
| Tenant clothing, jewelry and personal items | Tenant | Not covered |
| Appliances brought in by the tenant | Tenant | Not covered |
Rent Default, Lost Rental Income and Rental Income Changes
Landlord insurance may cover lost rental income, but only when the reason meets the policy terms and conditions. Loss of rent usually applies after an insured event which causes damage to the building or landlord’s contents and can cover rental income loss during repairs; if you make a claim, the payout depends on the policy terms. Rent default may apply when a tenant stops paying rent under a valid rental agreement, but it may be an optional cover and not a standard policy inclusion.
Landlord insurance does not cover normal market rent changes. If weekly rent falls due to demand, local conditions or oversupply, the property owner usually carries that risk.
| Legal liability issue | What the cover may help with | Landlord responsibility |
| Tenant or visitor injury | Legal costs and compensation claims linked to bodily injury | Keep the property safe and repair hazards promptly |
| Damage to someone else’s property | Claims for damage to another person’s property caused by the rental property | Maintain structures, trees, fixtures and fittings |
| Unsafe conditions | Defence costs if a claim alleges the landlord failed to manage a known risk | Keep inspection records and act on tenant repair requests |
| Neglected maintenance | May be limited or excluded if poor maintenance caused the issue | Fix known problems before they create safety risks |
Check the Landlord Insurance Cost and Policy Gaps
Landlord insurance cover protects Australian landlords from major rental property risks, but it does not cover everything. Most policies exclude wear and tear, poor maintenance, tenant possessions, building defects, pre-existing damage and some natural disasters.
Before choosing a landlord insurance policy, check the Product Disclosure Statement. Review the sum insured, building sum insured, contents sum insured and exclusions. Also check that the correct optional covers have been selected. The right cover should match your rental agreement, property type, location and personal circumstances.
Duo Insurance can help Australian landlords compare insurance options and find cover that suits their rental property risks.
| Scenario | Claim Calculation Example |
| Loss of rent after an insured event | $600 weekly rent × 8 weeks of repairs = $4,800 lost rental income* |
| Rent default by the tenant | $600 weekly rent / weekly rental amount × 6 weeks unpaid = $3,600 lost rent* |
*The amounts shown are subject to the deduction of bond money and policy excesses where applicable
Vacancy, Cover Short-Term Rentals and Policy Conditions
A landlord insurance policy may limit or cease to provide coverage if the rental property sits vacant for too long without prior written acceptance from the Insurer. Many insurance providers set vacancy limits, often around 30 to 100 days. The exact limit depends on the policy.
Short-term rentals and holiday rentals can also affect cover. A standard policy may not cover Airbnb-style stays or cover short term rentals used as holiday accommodation unless this protection is included.
Before leaving a property vacant or changing how it is rented, landlords should check the Product Disclosure Statement.
Natural Disasters, Flood Cover and Optional Cover
Landlord insurance may cover events such as fire, storm and vandalism. However, natural disaster cover varies between policies. Some events such as flood may need to be selected as an optional cover. Others may have limits, higher excesses or waiting periods.
Landlords should check the Product Disclosure Statement for:
- flood cover and how the policy defines flood, including whether it covers water over normally dry land
- storm damage, bushfire and storm surge cover
- exclusions for extreme weather events
- waiting periods before cover starts
- higher excesses for certain events
- limits on repair or replacement value
- whether optional cover is needed
A landlord should not assume every natural disaster is covered. The full details depend on the insurance provider and policy terms.
Make a Claim: Legal Liability and Landlord Responsibilities
Landlord insurance often includes legal liability cover. This can help if a tenant, visitor or another person suffers bodily injury at the rental property, or third party property is damaged through the ownership, operation and maintenance of insured property, and claims the landlord failed to provide a safe property.
However, liability cover does not remove the landlord’s duty to maintain the property. If a landlord ignores hazards, delays repairs or fails to act like a reasonable person, exclusions may apply. Some policies may also help with legal expenses tied to covered disputes or liability claims, but coverage still depends on policy limits and exclusions. Keeping inspection, repair and tenant request records can help support a future claim.
| Legal liability issue | What the cover may help with | Landlord responsibility |
| Tenant or visitor injury | Legal costs and compensation claims linked to bodily injury | Keep the property safe and repair hazards promptly |
| Damage to someone else’s property | Claims for damage to another person’s property caused by the rental property | Maintain structures, trees, fixtures and fittings |
| Unsafe conditions | Defence costs if a claim alleges the landlord failed to manage a known risk | Keep inspection records and act on tenant repair requests |
| Neglected maintenance | May be limited or excluded if poor maintenance caused the issue | Fix known problems before they create safety risks |
Check the Landlord Insurance Cost and Policy Gaps
Landlord insurance cover protects Australian landlords from major rental property risks, but it does not cover everything. Most policies exclude wear and tear, poor maintenance, tenant possessions, building defects, pre-existing damage and some natural disasters.
Before choosing a landlord insurance policy, check the Product Disclosure Statement. Review the sum insured, building sum insured, contents sum insured and exclusions. Also check that the correct optional covers have been selected. The right cover should match your rental agreement, property type, location and personal circumstances.
Duo Insurance can help Australian landlords compare insurance options and find cover that suits their rental property risks.
Key Takeaways
- Landlord insurance does not cover every rental property cost, claim or issue.
- Common exclusions include wear and tear, poor maintenance, pre-existing damage, building defects and pest damage.
- Tenant belongings are not covered under landlord insurance and usually need separate renters insurance.
- Loss of rent and rent default cover may apply, but only when the claim meets the policy terms.
- Vacancy rules can affect cover if the rental property is left empty for too long.
- Short-term rentals or holiday letting may not be covered unless the policy allows this type of use.
- Flood cover, accidental damage and some natural disaster protection may need to be added as optional cover.
- Landlords should always check the Product Disclosure Statement, exclusions, claim limits, excesses and optional cover before choosing a policy.
Frequently Asked Questions (FAQs)
Does home insurance cover an investment property?
No. Standard home insurance is designed for owner-occupied properties, as is more often than not noted in the accompanying target market determination document; they are written and priced for properties where the owner lives in the home. They also do not extend to cover additional risks that a rental property poses to the owner, such as malicious and or deliberate damage by a tenant or loss of rental income due to property damage or rental default.
Is landlord insurance tax-deductible in Australia?
Landlord insurance may be tax-deductible if it relates to an income-producing investment property. This can depend on the policy, property use and your personal circumstances.
Does landlord insurance cover accidental damage by tenants?
Not always. Some policies exclude accidental damage by tenants unless optional cover is added. Check the Product Disclosure Statement.
Does landlord insurance cover tenant belongings?
No. Tenants usually need renter’s insurance or contents insurance for their own furniture, clothing, electronics and personal items.
Is landlord insurance legally required in Australia?
No. Landlord insurance is not legally required, but some lenders may require building insurance and a Certificate of Currency.
What should landlords check before buying cover?
Check what the insurance covers, including exclusions, sum insured and optional cover, and note that strata insurance may already apply to the building in some strata properties, so confirm what is and is not covered before adding landlord contents or other protection. Also review excesses, claim limits, vacancy rules and minimum premiums.
