Investment property? You need landlord cover, not standard home insurance
Tenant damage, rental default, liability claims, and investment properties face unique risks that standard home insurance doesn't cover. Landlord’s Insurance protects your rental income and investment.
What could go wrong
Investment properties generate income, until they don't. Tenant damage, rental default, liability claims, fire, and standard home insurance typically do not cover any of these risks once you rent out the property.
One bad tenant can cost you tens of thousands of dollars in damage and lost rent. If you’re claiming on home insurance for a rental property, your claim will likely be denied, and your policy may be cancelled.
The tenant damage
Your tenants move out after 18 months. The property is destroyed, the walls have been punched, the carpet is ruined, the kitchen is damaged, and the bathroom fixtures are broken. Repair costs: $28,000* . Bond only covers $3,000* . The tenants have disappeared and are not paying. You're $25,000* out of pocket and can't re-let the property until the repairs are done.
The liability claim
A tenant's visitor slips on the poorly maintained steps of your property and breaks their ankle. They're suing you for $85,000* , claiming inadequate maintenance and unsafe premises. You're the property owner, you're liable.
What this actually covers
Landlord’s Insurance
Landlord’s Insurance (also called Rental Property Insurance) protects investment properties:
Building cover:
- Same as home building insurance (structure, fixtures, fittings)
- Fire, storm, flood, and natural disasters
- Theft and vandalism
- Water damage and burst pipes
- Covers vacant periods between tenants
Malicious tenant damage:
- Intentional or malicious damage beyond normal wear and tear
- Damage exceeding bond amount
- Vandalism by tenants or their guests
- Theft by tenants
Loss of rent:
- Rental default (tenant stops paying)
- Property uninhabitable due to insured event (fire, flood)
- Tenant abandons property mid-lease
- Eviction periods
- Vacancy periods after insured damage
Legal liability:
- Public liability for injuries on property
- Legal expenses for tenant disputes
- Eviction proceedings
- Debt recovery costs
- Lease dispute resolution
When you need this
Protecting your investment
You need this immediately when you:
- Buy an investment property to rent out
- Move out of your home and rent it to tenants
- Inherit property and decide to rent it
- Start building a property portfolio
- Have tenants moving in
Owner-occupied vs investment:
Once you rent it out, you MUST switch from home insurance to landlord's insurance. Standard home policies exclude rental activities.
Growing your property portfolio
Scale considerations:
- Multiple properties under one policy (portfolio discounts)
- Higher rent guarantee limits as rents increase
- Stronger legal protection for tenant disputes
- Consider property manager bonds and guarantees
Established and optimising
Review your cover annually:
- Update your sum insured when you buy new equipment
- Check depreciation—replace with "new for old" cover if possible
- Add portable equipment extension if the team works remotely
- Consider business interruption cover (lost income during repairs)
Common questions
Can't I just keep my home insurance when I rent it out?
No. Standard home insurance excludes rental activity. If you claim and your insurer discovers tenants were living there, your claim will be denied and your policy will be cancelled. You MUST switch to landlord’s insurance.
Does this cover tenant belongings?
No. Landlord’s insurance covers your building and your interests. Tenants are responsible for insuring their own contents with renters’ insurance.
What if my tenant sublets without permission?
Depends on policy. Unauthorised subletting may void coverage. Always include "no sub-letting without permission" clauses in leases and enforce them.
Can I claim for vacancy between tenants?
No. Standard landlord’s insurance only covers lost rent due to insured events (such as fire, flood, or tenant default). Normal vacancy while finding new tenants isn't covered.
What if my property manager goes broke?
Landlords’ insurance typically does not cover a property manager’s insolvency. Verify that your property manager holds professional indemnity insurance and is protected under client money protection.
Does this cover Airbnb or short-term rentals?
Standard landlords’ insurance usually excludes short-term rentals. For Airbnb, holiday lets, or student accommodation, you need specialised short-stay or commercial landlord insurance.
What else might I need?
Landlord’s Insurance covers your investment property, but not everything:
If you have multiple investment properties:
Bundle them under portfolio landlord insurance for better rates and easier management.
If you provide furnished rentals:
Add contents coverage for your furniture, appliances, and furnishings.
If you use a property manager:
Ensure they have Professional Indemnity insurance and client money protection.
If you're in a strata scheme:
Check what building insurance is covered by the body corporate versus what you need to obtain separately.