Landlord insurance | Simples! (2024)

A landlord looking to safeguard a free-standing house or building (that isn’t covered by a strata policy) could take out home insurance, also known asbuilding insurance, to protect the walls, roof and property fencing. This policy could be combined with contents insurance to cover furniture or other contents provided to the tenant with the home. You may also find that some insurers offer automatic contents cover within a landlord’s insurance policy.

Having landlord insurance cover can also provide peace of mind for things like loss of rent, tenant default and malicious damage.

Landlord insurance covers your investment property for a range of incidents and insured events, including some that are unique to rental properties.

Some events (like flood damage andelectric motor burnout) may be offered as optional cover, which you can add to the cost of your policy. You may also be able to purchase optional cover in the event that a tenant defaults on their rent or maliciously causes damage to your property.

The table below outlines the common inclusions and exclusions of landlord building insurance, landlord contents insurance and landlord combined insurance.

There may be terms, conditions, limits and exclusions attached to your coverage, so make sure you read and understand the policy documents before taking out insurance.

The cost of landlord insurance is different for every person. This is because, like other types of insurance, your premiums are influenced by a number of factors that are usually unique to you.

Some of these factors that can affect the cost of your landlord insurance policy include:

• The location of your property. Many Australian homes are vulnerable to a range of natural hazards such as floods, bushfires, cyclones, storm surges, subsidence and erosion (including sinkholes). If your property is in a hazard-prone area, this will reflect on the cost of your landlord insurance policy.
• Your suburb’s crime rate. The higher the crime rate in your property’s area, the more your insurance policy will likely cost.
• Sum insured. How much your building and contents are insured for should you need to rebuild or replace them generally influences your premium.

As a general rule, yourlandlord insurance premiums are tax-deductible, as well as other expenses associated with renting out your property like:¹

• Advertising for new tenants
• Property management fees
• Council rates
• Water bills
• Land tax
• Cleaning, gardening and lawn mowing bills
• Pest control expenses
• Property repairs and maintenance
• Real estate agent fees and commissions
• Interest charged on your home loan
• Legal expenses for:
  • Evicting a defaulting tenant
  • Taking court action for loss of rental income
  • Defending a damages claim brought on by a third party for injuries suffered at your rental property.

Before making any decisions about your tax return, consider speaking with an accountant or other professional.

As an Australian landlord, fires and floods are among the big risks to your investment property. Catastrophic events like these can leave you with a massive repair bill, and you could find yourself unable to afford your property’s repair and rebuilding costs.

This is why you need to accurately calculate the full replacement value of your property and take inventory of all your belongings there. Here are a few things you can do to achieve this:

• Document everything you own – your rental property, permanent fixtures, furnishings and any contents residing within the property – for insurance purposes. Videos are good for this.
• Keep the receipts and take photos of all your items leased with the property to make sure there’s a record of your ownership.
• Work out the accurate value of your property and contents. You might find some online calculators that can help you do this.