How Much is Landlord Insurance? - Canstar (2024)

If you have an investment property that you are looking to rent out, then you may be curious about the cost of landlord insurance. We’ve taken a look at how landlord insurance works, the average cost around Australia, and the factors that can drive that cost.

The past few years have seen significant disruptions in the Australian economy, with COVID-19 and extreme weather conditions leading to flooding along parts of the east coast. Some providers have felt economic effects, particularly those who provide landlord insurance.

For a time during the pandemic, many landlord insurance providers withdrew their coverage, or announced that they would not take on new customers. In fact, nearly 80% of Australian landlord insurance providers bowed out of the industry, and many of those who remained tightened their conditions.

Of those landlord insurance providers who are still in the industry, many have withdrawn their cover for loss of rent, and some have changed their claim limits. Meanwhile, the price of premiums has risen relative to pre-COVID levels.

So, how much can you expect to pay for landlord insurance in 2023, and what factors drive these prices?

What is the average cost of landlord insurance in 2023?

To find out the average cost of landlord insurance around the country, Canstar’s expert research team crunched the numbers for every state or territory, including separate calculations for North Queensland (all areas north of Rockhampton).

The below figures take into consideration the average annual insurance premium you might expect to pay for a house, as well as for an apartment:

Average annual Australian landlord insurance premiums – 2023

Source: www.canstar.com.au. Based on quotes obtained for Canstar’s 2023 Landlord Insurance Awards and Star Ratings (March 2023), for a range of addresses, property assumptions and building sum insured amounts with a target excess of $1,000. *North QLD is defined as the portion of Queensland north of, but not including, Rockhampton.

The table below displays a snapshot of 5-Star landlord insurance policies on Canstar’s database, sorted by provider name (alphabetically). The results shown are based on a house in NSW.

What can impact the cost of landlord insurance?

Landlord insurance can cover you for a number of different things, including damage to property, damage to your contents and loss of rent. Depending on the insurance provider you choose, you may be covered for some or all of these things.

According to the Insurance Council of Australia, cover for loss of rent is not necessarily included as standard on all landlord insurance policies, meaning that you might need to add it on as an extra, and your premiums might therefore be more expensive.

Aside from this, there are a number of possible things that can affect the cost of your landlord insurance premiums, including:

• The crime rate in the local area: if your investment property is in an area that is known to be high-risk for burglary or other types of crime, your premiums may be more expensive.
• The price you charge for rent: Landlord insurance can cover you for loss of rent, so the more you charge in rent for your investment property, the higher your premiums might be.
• The replacement cost of your belongings: Insurance providers will take into account the replacement cost of things such as furniture, carpets and blinds in your property, as well as the cost to rebuild when calculating your premiums.
• The risk of extreme weather events: If your investment property is in an area that is known to be at a high risk of weather events like floods and bushfires, then the premiums you pay for landlord insurance might be higher as a result.
• The level of cover and excess you choose: The more extensive the cover you choose, the higher your premiums might be. This might be offset by your excess, which is the amount payable when you make a claim before your insurance pays out. The higher the excess you choose, the cheaper your premiums might be.
• The number of properties you are insuring: Some insurance providers offer a multi-policy discount, meaning that if you are insuring more than one property, you may be able to save on premiums depending on your provider.

Is landlord insurance compulsory?

Although there is no legal requirement to have landlord insurance in Australia, it is likely that mortgage lenders will require you to have it as one of the conditions of your home loan. According to the Real Estate Institute of New South Wales (REINSW), it is also “standard industry best practice” to have this kind of cover, and many property management teams will also insist on landlords having insurance for their property before agreeing to take it on.

What are some ways to save on landlord insurance?

If landlord insurance cost is a concern and you are looking to save on premiums, there may be some ways that you could accomplish this. One of these might be to re-evaluate the excess on your policy, and another might be to consider possible tax deductions for which you could be eligible.

Consider your excess

The excess on an insurance policy is an out-of-pocket cost that the policyholder must pay in the event that they need to make a claim. When an excess applies, it must be paid before the insurance provider pays out any additional money on a claim.

A low excess on an insurance policy can mean higher premiums, and vice versa. If you were to increase your excess, you might lower the cost of your premiums, although the trade-off would be that in the event of a claim, you would need to pay more upfront.

Consider possible tax deductions

According to the Australian Tax Office (ATO), property investors may be able to claim deductions for ‘most’ of the expenses incurred while renting a property out, and these expenses can include things related to the maintenance and management of the property.

If you are not already claiming these deductions, it may be worth your while to consult a qualified accountant and find out if your landlord insurance premiums can be claimed as a deduction, and if you are eligible for any possible relief on your taxes.

→ Related: Investment property tax benefits and tax tips

Which landlord insurance providers offer outstanding value?

If you are in the market and are curious about which landlord insurance providers may be suitable for your requirements, you may start by considering the winners of Canstar’s Landlord Insurance Star Ratings and Awards.

The Awards use a sophisticated and unique methodology that compares both cost and features across landlord insurance products for providers on our database, aiming to highlight those that offer their customers outstanding value for money.

Cover image source: SaiArLawKa2/Shutterstock.com

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This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.