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Landlord Insurance Explained: What It Covers and Why It Matters

July 08

05 min read

Owning an investment property comes with great potential — but also great responsibility. One of the smartest moves a landlord can make is protecting that investment with landlord insurance.

But what exactly does it cover? And why is it so important?

Let’s break it down.

What Is Landlord Insurance?

Landlord insurance is a specialised type of cover designed specifically for owners of rental properties. It protects against financial losses related to:

Property damage
Loss of rental income
Tenant-related risks like rent default or vandalism
Legal liability

Whether you own a house, unit, townhouse, or apartment, most general insurers in Australia offer landlord policies tailored to different property types. Many policies bundle building, contents, and landlord-specific protection into one convenient plan.

What Does Landlord Insurance Typically Cover?

Coverage can vary based on the provider and level of policy chosen, but most comprehensive landlord insurance includes:

Tenancy Cover

Loss of rental income
Tenant rent default
Malicious or accidental damage by tenants or guests
Theft by tenants
Legal expenses related to tenant disputes
Liability protection (if someone is injured on your property)

Building Insurance

Protects the property’s structure, including:

Pipes, cabling, and plumbing
Fixtures and fittings
External structures (e.g. garages, sheds)

Covered events may include:

Fire and explosions
Storms and flooding
Lightning or earthquake damage
Vandalism or break-ins
Water leaks
Falling trees
Vehicle impacts

Contents Insurance

For furnished rentals, contents insurance protects items you provide such as:

Appliances
Furniture
Curtains, carpets, and light fittings

Coverage typically includes the same events as listed under building insurance.

Most policies are also customisable. You may be able to add cover for:

Accidental damage
Appliance breakdown
Civil unrest or riot damage

What Isn’t Covered?

While landlord insurance offers broad protection, it doesn’t cover everything. Common exclusions include:

General wear and tear (e.g. faded paint, mould)
Structural defects or poor workmanship
Belongings owned by tenants
Routine maintenance expenses (like lawn mowing or plumbing services)
Market-related fluctuations in property value
Damage from unapproved tenant repairs

Do You Really Need Landlord Insurance?

While it’s not legally required, landlord insurance can save you from significant financial loss. Even reliable tenants can default on rent, and unexpected events like storms or fire can happen to anyone.

Here’s why it’s worth it:

Covers loss of income if tenants default or vacate suddenly
Protects you from legal liability if someone is injured at your property
Shields your investment from costly repairs due to damage
Offers peace of mind in uncertain economic times

Is Landlord Insurance Worth the Cost?

In short — yes.

Accidents happen. And without insurance, landlords are often left footing the bill for repairs, legal costs, or loss of income.

Even better? Landlord insurance premiums are often tax-deductible. So not only are you protecting your property, you might also reduce your tax bill. (Check with your accountant to confirm your eligibility.)

Choosing the Right Landlord Insurance

Not all policies are created equal. To find the right fit for your needs:

1. Know What You Need

Decide what’s most important — whether that’s rent protection, tenant damage, or natural disaster cover.

2. Compare Providers

Use comparison sites to explore policies. Look at coverage limits, exclusions, premiums, and customer reviews.

3. Review the Product Disclosure Statement (PDS)

Don’t skip the fine print! Check what’s covered, what’s not, and any claim limits or special conditions.

4. Understand the Claims Process

Fast claims processing can make a huge difference when something goes wrong. Look into how providers handle claims and how customers rate their service.

Frequently Asked Questions

Is landlord insurance tax-deductible?

Yes. The ATO generally allows deductions for expenses related to managing and maintaining a rental property — including landlord insurance premiums. The property must be available for rent, and records should be kept to support your claim.

Does landlord insurance include building cover?

Yes, most policies include protection for the physical structure — from walls and fixtures to plumbing and external structures.

Is public liability included?

Usually, yes. This protects you if someone is injured on your property and seeks compensation — covering legal fees and damages.

Will it cover tenant damage?

Yes — typically both accidental and malicious damage are covered. But general wear and tear is excluded, so it’s important to check the specifics of your policy.

Protecting Your Investment with the Right Team

At Tate Brownlee Real Estate, we understand that your investment property is more than just bricks and mortar — it’s part of your financial future.

Our experienced property management team can help you:

Navigate landlord insurance
Find high-quality tenants
Stay compliant with legislation
Maximise your rental returns

Ready to secure your property and your peace of mind?

👉 Get in touch today for a free rental appraisal or speak to one of our property managers about landlord insurance and how we can help you protect your investment.