Landlord insurance: what it covers and how to compare it
Landlord insurance covers an investment property against the risks that come with tenants: loss of rental income, malicious or accidental damage by tenants, and your legal liability as the owner. It is sold either as a combined building and landlord policy for a house, or as landlord contents and rental cover for a strata unit where the owners corporation insures the building.
A standard home and contents policy is written for an owner who lives in the home. NRMA's home PDS, for example, does not cover deliberate or malicious damage by anyone who normally lives in the home, including a tenant, which is exactly the risk a landlord most needs covered. That is the main reason landlords need a policy designed for the purpose instead of keeping the one they had when they lived there. Our guide to home and contents insurance covers the owner-occupier side.
By Better Rate Mate Editorial Team ยท Last reviewed
General advice only. It doesn't consider your circumstances. Read the PDS and TMD before you decide.
What landlord insurance usually covers
Policies differ in what is standard and what is optional, but most are built from the same blocks. The cheaper end of the market strips out rent and tenant cover, so compare the blocks rather than the headline premium.
| Cover | What it pays for | Common limits and conditions |
|---|---|---|
| Building | Repair or rebuild of the structure after listed events | Only for houses and titles you insure yourself; not needed for most strata units |
| Landlord contents | Items you supply: carpets, blinds, appliances, furniture in a furnished rental | Sum insured you nominate; fixtures may already sit under a strata policy |
| Loss of rent after an insured event | Rent while the property cannot be lived in because of fire, storm or other listed damage | Capped by weeks or a dollar amount |
| Rent default | Rent a tenant stops paying or leaves owing | Capped by weeks or amount; check how the bond is treated and what tenancy steps are required |
| Tenant damage | Malicious, intentional or accidental damage by tenants or their guests | Separate excesses often apply; wear and tear always excluded |
| Legal liability | Your liability as owner for injury or property damage at the rental | Set in the PDS; check it matches your home policy's limit |
House or strata unit: what you need to insure
If the rental is a freestanding house, you insure the building and any contents you supply, plus the landlord-specific covers. A combined landlord building policy handles all of it.
If the rental is a unit in a strata scheme, the owners corporation's policy insures the building and common property, so you do not buy building cover. You still need landlord contents (carpets, blinds, appliances and anything else you own inside the lot, where the strata policy does not cover them), loss of rent and tenant damage cover, and liability for your lot. Read the strata policy first, because the boundary between what it covers and what you must cover varies by scheme and by state.
Neither policy covers your tenants' belongings or their liability to you. That is theirs to insure, through renters insurance for tenants.
Landlord insurance vs home insurance
The difference is who lives in the home. An owner-occupier home policy is written for you living there, and it can stop working once tenants move in. A landlord policy is written for a tenanted property and adds the covers a home policy doesn't have. This is how one mainstream home PDS of each kind, and two landlord PDSs, handle the risks.
| Risk | Owner-occupier home policy | Landlord policy |
|---|---|---|
| Renting the whole home out | Suncorp's home PDS gives no cover at all once the whole home is rented to tenants, and both Suncorp and NRMA require you to tell them about a change in how the home is used | Written for a tenanted home; NRMA's landlord PDS won't pay without a rental agreement in place |
| Malicious or intentional damage by the tenant | Excluded: NRMA's and Suncorp's home PDSs don't cover malicious acts by people who live in the home | Covered as 'damage by occupant' in NRMA's landlord PDS, less a deduction of four weeks' rent plus the excess |
| Accidental damage, neglect and carelessness by the tenant | Not written for it | Narrower: NRMA excludes tenant neglect, carelessness and poor housekeeping; Terri Scheer excludes neglect, poor housekeeping, scratches and dents |
| Rent the tenant doesn't pay | No | Optional in NRMA's: up to 15 weeks after the first 4 weeks, plus legal costs up to $5,000. Terri Scheer's: up to 20 weeks if a tenant leaves owing rent, after the bond is applied |
| Lost rent after a fire, storm or other insured event | No | NRMA: up to 52 weeks, or until the home can be lived in again |
| Your legal liability as owner | Suncorp's home PDS removes liability cover once the whole home is rented | $20 million in the NRMA and Terri Scheer landlord PDSs |
| Furniture, curtains, carpets and appliances you leave for the tenant | Check your PDS: cover can end once the home is rented | NRMA covers contents left for the tenant's use, including unattached appliances |
| The home sitting empty | NRMA: tell it if the home will be empty for 60 days or more | NRMA: tell it if the property will be empty for 60 days or more, and take reasonable steps to lease it; Terri Scheer stops most cover after 90 days vacant unless agreed |
Tenant damage: accidental, malicious, or wear and tear
Landlord policies draw sharp lines between three kinds of damage. Malicious or intentional damage, such as vandalism or a deliberate act by the tenant, their guests or an approved pet, is what landlord cover is built for. NRMA's landlord PDS covers it as 'damage by occupant', less a deduction of four times the weekly rent plus the standard excess, and once it has paid a claim for a tenant, it won't pay another for the same tenant or rental agreement.
Accidental damage and carelessness are treated more narrowly. NRMA's damage-by-occupant cover excludes tenant neglect, carelessness, poor housekeeping and unhygienic habits, and Terri Scheer's tenant damage cover excludes poor housekeeping, neglect, pets, scratches and dents. Wear and tear, the gradual deterioration from normal use, is excluded by both, and tenancy law doesn't make the tenant pay for it either.
Pets and the bond have their own rules. NRMA covers damage by a pet kept with your approval within damage by occupant, while Terri Scheer covers pet damage separately, up to $5,000 a period, after any pet bond is applied. Terri Scheer also reduces building, contents and loss of rent claims by the available bond, and assumes at least four weeks' rent was taken as bond even if less was.
Rent default and the bond
Rent default cover is the benefit landlords most often assume they have and then discover is limited. Before relying on it, check four things in the PDS: whether the bond is applied before the policy pays, how many weeks of rent it pays at most, what tenancy steps it requires (typically a written lease, tenant checks and breach notices issued under your state's residential tenancies law), and whether the property must be professionally managed.
Bond limits and the tenancy process are set by state law, so the checks an insurer expects differ between states. A rent default claim usually follows the state process: the bond claim, and an application to the state tribunal for anything the bond doesn't cover. These are the bodies involved in the larger states and the ACT.
| State | Rules and guidance | Who holds the bond | Bond and tenancy disputes | Maximum bond |
|---|---|---|---|---|
| NSW | NSW Fair Trading | NSW Fair Trading, through Rental Bonds Online | NSW Civil and Administrative Tribunal (NCAT) | 4 weeks' rent |
| Victoria | Consumer Affairs Victoria | Residential Tenancies Bond Authority (RTBA) | Rental Dispute Resolution Victoria, then the Victorian Civil and Administrative Tribunal (VCAT) | Usually one month's rent; higher limits can apply where rent is over $900 a week |
| Queensland | Residential Tenancies Authority (RTA) | RTA, within 10 days of being paid | RTA dispute resolution, then the Queensland Civil and Administrative Tribunal (QCAT) | 4 weeks' rent for general tenancies, however the bonds are named |
| Western Australia | Consumer Protection (WA) | Bonds Administration, within 14 days of being paid | Commissioner for Consumer Protection for bond releases; Magistrates Court | 4 weeks' rent unless rent is over $1,200 a week, plus a pet bond of up to $350 |
| ACT | ACT Revenue Office (bonds) and the ACT Civil and Administrative Tribunal (ACAT) | ACT Revenue Office, through its Rental Bonds Portal | ACAT | Not checked for this table |
What landlord insurance does not cover
Exclusions are where cheaper and dearer landlord policies differ most. These are the ones to check in every PDS.
- Wear and tear, which is the gradual deterioration a tenant is not responsible for under tenancy law.
- Gradual damage, mould or rot that was not reported and repaired.
- Loss of rent because you cannot find a tenant, or because the property was not fit to rent.
- Damage by pets unless the policy covers it, and often only where you consented to the pet.
- Short-term letting through platforms like Airbnb, unless the policy is designed for it. Standard landlord policies usually assume a residential tenancy of a set minimum length.
- Anything in a unit the owners corporation is responsible for, or the strata excess, unless your policy says otherwise.
Holiday lets, Airbnb and Stayz
Standard landlord policies are written for residential tenancies, usually of a set minimum length, so short-stay letting through a platform is a different risk. If you let a property for holiday stays, ask your insurer whether the policy covers short-term guests, or buy cover written for that use, and tell your insurer before the first booking.
Platform programs don't fill the gap on their own. Airbnb says Host damage protection, part of its AirCover for Hosts program, is not insurance or a financial service, while its separate Host liability insurance, up to US$1 million, is insurance underwritten by third-party insurers. Airbnb also says AirCover isn't a substitute for your own insurance. Other platforms run their own programs on their own terms, so read them before relying on them.
What landlord insurance costs
There is no published average for landlord insurance, so judge a premium by what drives it. These are the factors that move it, and the ones you control.
- House or unit: a house needs building cover as well; a strata unit usually needs only landlord contents, rent and liability cover, because the owners corporation insures the building.
- Rent default cover: the number of weeks it pays, and whether it is included or an option, are among the biggest differences between policies.
- Excesses: tenant damage and rent default claims often carry their own, higher excess, and a higher excess lowers the premium.
- Location: the address sets the risk of storm, flood, bushfire and theft, as it does for any home policy.
- Tax: premiums for a property that is rented or genuinely available for rent are generally a deductible rental expense, so the after-tax cost is lower than the premium.
Is landlord insurance tax deductible?
For a property that is rented out or genuinely available for rent, the ATO treats insurance premiums for the rental as a deductible rental expense, alongside items like council rates and property management fees. If only part of the property is rented, or it is rented for only part of the year, the deduction is apportioned. The ATO's rental properties guide has the current rules and examples.
The ATO can also see much of this information. It runs a landlord insurance data-matching program, covering 2021-22 to 2025-26, that collects rental property insurance details including premiums paid and claim payouts, and a rental bond data-matching program with data going back to 1985, which it collects up to and including 2025-26. It compares both with tax returns.
General advice only. This information doesn't take into account your objectives, financial situation or needs. Consider whether the product is right for you and read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you decide. We don't compare every product in the market, and we may earn a commission if you take up a product through our links.
What to watch for
- Check the tenancy conditions. Rent default cover often depends on a written lease, reference checks and correct breach notices.
- Separate excesses. Tenant damage and rent default claims can carry their own, higher excess.
- Vacancy clauses. Cover can reduce or stop if the property sits empty between tenants for longer than the PDS allows.
- Short-term stays are different. Standard landlord cover generally does not extend to holiday letting.
- Strata units: do not insure what the owners corporation already covers, and do not assume it covers what is inside your lot.
Common questions
Is it worth getting landlord insurance?
For most investors the value is in the covers a home policy does not give you: tenant damage, rent default and liability as a landlord. A single tenancy that ends with serious damage and weeks of unpaid rent beyond the bond can cost more than many years of premiums. Whether that trade suits you depends on your cash buffer and how the property is managed.
What doesn't landlord insurance cover?
Wear and tear, gradual damage, loss of rent when you simply cannot find a tenant, damage from pets you did not agree to, and short-term holiday letting, in most policies. Strata unit owners are also not covered for anything the strata policy is responsible for.
Do I need landlord insurance for a strata unit?
You do not need building cover, because the owners corporation insures the building. You still need cover for your own fixtures and contents inside the lot, loss of rent and tenant damage, which is what a landlord contents or strata landlord policy provides.
Can I keep my home and contents policy when I rent the house out?
Usually not. Most home policies assume you live in the home and limit or exclude cover once it is tenanted. Tell your insurer before the tenancy starts and switch to a policy written for rental properties.
Is landlord insurance tax deductible?
Premiums for a property that is rented or genuinely available for rent are generally deductible as a rental expense. See the ATO's rental properties guidance for apportionment rules.
How much should landlord insurance cost per year?
There is no published average to measure a quote against. The premium depends on whether you insure a house or a unit, the weeks of rent default cover, the excesses and the address. Compare quotes on the same cover and excess, then remember the premium is generally tax deductible for a rental.
What is not covered by homeowners insurance?
A standard home and contents policy excludes wear and tear, rust, mould, pests and poor maintenance, and commonly storm surge, gradual leaks and theft without forced entry. Flood is excluded by some policies. For landlords, the gap that matters most is tenant damage: NRMA's home PDS, for example, doesn't cover deliberate or malicious damage by anyone who normally lives in the home, including a tenant. Our home insurance guide has the full list.
Which company offers the best home and contents insurance?
No insurer is best for every home, and we don't rank them. The best policy for you covers the events your address is exposed to, including flood if that's a risk, at a sum insured that would rebuild your home, with limits and an excess you can live with. Compare Key Facts Sheets on the same sum insured and excess, then check who issues each brand and AFCA's complaint numbers in our home insurance guide.
Can the ATO track rental income?
It can see a lot of it. The ATO's data-matching programs collect landlord insurance data, including premiums and claim payouts, for 2021-22 to 2025-26, and rental bond data going back to 1985, and compare them with tax returns.