What is Landlord Insurance?

Landlord insurance is a specialised insurance policy tailored for rental providers and property investors. It provides financial protection against a range of tenant-related risks and property damage scenarios that standard home and contents policies don’t cover. Whether you’re leasing out a house, unit, townhouse, or apartment, landlord insurance can help safeguard your investment.

Typical inclusions in landlord insurance policies:

Building insurance

Covers structural damage caused by fires, storms, floods, or vandalism.

Contents insurance

Covers furnishings and appliances if the property is leased fully or partly furnished.

Tenant-related cover

Includes protection for rent default, malicious damage, and legal expenses.

It’s not a legal requirement, but for most residential landlords, it’s a smart financial decision.

What Does Landlord Insurance Usually Cover?

Every insurer offers slightly different coverage, but most landlord insurance policies in Australia provide protection for:

Tenant & Rental Income Risks

• Damage or theft by tenants or their guests
• Loss of rental income due to property damage
• Rent default or non-payment
• Legal expenses associated with tenant disputes or evictions
• Liability cover if someone is injured on your property

Building Cover

• Fire and explosion damage
• Storm, flood, or impact damage (e.g. from falling trees or vehicles)
• Break-ins or acts of vandalism
• Water damage from burst pipes or leaks

Contents Cover (For Furnished Rentals)

• Damage to or theft of whitegoods, carpets, curtains, and furniture
• Losses from natural disasters or break-ins

Optional extras may also be available, such as accidental damage and appliance breakdown cover.

What’s Not Covered?

Like all types of insurance, landlord insurance has exclusions. Here’s what’s typically not covered:

• General wear and tear (e.g. worn carpet or fading paint)
• Structural defects or poor workmanship
• Damage caused by unapproved DIY or renovations by tenants
• Tenants’ personal belongings
• Routine property maintenance or minor repairs

Understanding your policy exclusions is just as important as knowing what’s included.

Do Rental Providers Really Need Landlord Insurance?

Absolutely. While most tenants do the right thing, unforeseen issues like job loss, natural disasters, or rental disputes can arise. Landlord insurance provides a safety net, ensuring you’re not left covering major costs out of pocket.

In today’s market, where repair costs are rising and rental yields are tightening, landlord insurance is often more affordable than a single unexpected repair or missed rent payment.

Is Landlord Insurance Tax-Deductible?

Yes! The Australian Tax Office generally allows landlord insurance premiums to be claimed as a tax deduction, provided the property is either rented or genuinely available for rent. Keep accurate records and speak to your accountant or tax advisor for tailored advice.

How to Choose the Right Landlord Insurance Policy

With dozens of insurers out there, here’s how to make a smart choice:

Define your priorities

Focus on what matters most for your property: rental income protection, natural disaster coverage, or liability?

Compare quotes

Use insurance comparison tools and check customer reviews. Cheapest isn’t always best.

Read the Product Disclosure Statement (PDS)

Understand what’s included, any excesses, and policy limits.

Know the claims process

A good policy isn’t just about coverage, it’s about how easy it is to make a claim when you need it most.

Final Word: Peace of Mind for Property Investors

In a climate where rental market risks are real and repair costs are on the rise, landlord insurance offers essential peace of mind. While it won’t stop problems from happening, it will ensure they don’t financially derail your investment journey. For a relatively low annual cost — and with tax benefits — it’s a smart move for any rental provider looking to protect their investment property and rental income.

Looking to maximise your property returns while minimising risk?

Speak to our experienced property management team at First National Real Estate Neilson Partners about managing your rental property the smart way, and get guidance on choosing the right landlord insurance cover for your needs.