Landlords insurance for residential investment properties
Owning a rental property brings different exposures from an owner-occupied home. RMA Insurance Brokers helps property owners review building cover, landlord contents, loss of rent, tenant-related damage and liability so the policy matches the tenancy.
Landlords insurance at a glance
Landlords insurance is arranged to help protect the financial interests of a residential investment property owner. It is different from a standard home and contents insurance policy because it can address rental-related exposures that owner-occupied cover usually excludes or limits.
Cover can be arranged for houses, units, townhouses and apartments, with sections selected to match the ownership structure, tenancy type and property features.
Key areas
- Building & permanent structures
- Landlord contents & fittings
- Loss of rent
- Tenant damage
- Legal liability
- Strata & body corporate gaps
Who should consider landlords insurance?
The right arrangement depends on the property type, tenancy and whether the building is covered by a body corporate policy.
- Owners of freestanding rental houses
- Investors with units or townhouses
- Owners of furnished or part-furnished rentals
- Owners of regional and rural rental properties
- Rental property owners using a property manager
- Owners transitioning a home to an investment property
A review is particularly useful where you:
- have recently purchased or converted a property to rental use
- are unsure whether the building sum insured reflects rebuilding cost
- provide furniture, appliances or fittings to tenants
- rely on rental income to service debt or fund expenses
- own a strata-titled property and need to understand body corporate gaps
- have experienced tenant damage, default or a lengthy vacancy
What can landlords insurance cover?
Building & permanent structures
Building cover may respond to loss or damage to the house, unit, townhouse or apartment and, depending on the policy, garages, carports, fencing, driveways and other permanent structures at the insured address.
Sums insured are generally based on rebuilding cost, including demolition, debris removal and professional fees, rather than market value.
Landlord contents & fittings
Landlord-owned contents may include carpets, curtains, freestanding appliances and furniture provided with the tenancy. Fixtures, fittings and appliances can be treated differently between building and contents sections, so the policy definitions should be checked.
Tenant-owned belongings are not covered by the landlord's policy.
Loss of rent
Loss of rent cover may respond when the property cannot be tenanted after an insured event, or when a tenant defaults or breaks the lease, subject to the policy terms.
Waiting periods, documentation requirements and maximum payment periods vary between insurers.
Tenant damage
Depending on the policy, cover may be available for malicious or intentional tenant damage, and sometimes for certain accidental damage. Normal wear and tear is generally excluded.
Evidence, police reports, tenancy records and bond claims can all affect how a claim is considered.
Legal liability
Policies commonly include a legal liability benefit for personal injury or property damage to third parties arising from the property or its occupancy, subject to the policy limit and exclusions.
Strata & body corporate gaps
For strata-titled investment properties, the owners corporation or body corporate may be responsible for insuring the building and common property. Landlords insurance can help address exposures such as landlord contents, loss of rent, liability and items or improvements not covered by the strata arrangement.
It is worth reviewing both policies together to avoid duplication or uninsured exposures.
How a landlords policy is put together
Most policies are built around a building sum insured, a landlord contents sum insured, and selected rental-related extensions. The wording determines when each section responds.
Areas commonly reviewed include:
- rebuilding cost for the building and any outbuildings or improvements
- landlord-owned contents, fixtures and fittings provided with the tenancy
- loss of rent following an insured event or tenant default
- tenant damage, including any requirements for police reports or bond claims
- legal liability limits and whether they are adequate for the property
- strata building cover and any gaps for the individual lot
- excesses, including any that apply to tenant-related claims
- unoccupancy, renovation and holiday-letting conditions
Insurers treat these areas differently, so the wording and schedule are worth reading rather than assuming the cover matches a previous policy.
Underinsurance is an important issue to review
Building costs, trade availability and current construction standards have moved considerably in recent years. A sum insured set when the property was purchased may no longer reflect what it would cost to rebuild today.
Rebuilding also involves more than the house itself. Demolition, debris removal, professional fees and compliance with current building standards all form part of the cost, and access can add expense on regional blocks.
Where a sum insured falls short, the shortfall is generally met by the owner. A calculator can be a useful starting point, but the figure should be reviewed against the property as it stands today.
When should landlords insurance be reviewed?
A review is particularly worthwhile when:
- you purchase or convert a property to rental use
- renovations, extensions or a new shed are completed
- a tenancy changes from unfurnished to furnished
- rental income changes materially or the tenancy type changes, including a move to short-stay or holiday letting
- the property moves into a self-managed superannuation fund structure
- the property manager or tenancy agreement changes
- building costs or construction standards change materially
- a claim has been made and the sums insured need resetting
Reviewing at renewal, rather than after an event, gives time to adjust sums insured and cover sections before they are needed.
What may not be covered?
Landlords insurance is subject to policy conditions, limits, excesses and exclusions. Depending on the policy, cover may be restricted or unavailable for:
- wear, tear, gradual deterioration and maintenance issues
- damage caused by pests, vermin or termites
- faulty workmanship, structural defects and settling
- tenant belongings and personal items owned by the occupant
- loss-of-rent claims where required tenancy documentation or evidence has not been provided
- tenant default or arrears beyond the policy conditions and waiting periods
- damage caused by tenants where bond, evidence or reporting requirements are not met
- flood, storm surge or actions of the sea where not covered by the policy
- unoccupied periods beyond the limit allowed by the policy
- short-term, holiday or short-stay letting where the policy has been arranged for a residential tenancy and does not extend to that use
- damage arising from illegal activities where excluded under the policy
This is not a complete list. Cover for natural events, accidental damage, tenant liability and unoccupancy differs materially between insurers. The wording, schedule and circumstances determine how the insurance responds.
Example: tenant damage after a lease ends
Illustrative example
A tenant vacates a regional rental home at the end of a lease. During the final inspection, the property manager finds significant damage to internal doors, carpets and light fittings that appears to go beyond fair wear and tear.
The owner documents the damage, obtains repair quotes and pursues the bond. The bond does not cover the full cost of repairs and the former tenant disputes the claim.
The owner lodges a claim under the landlords insurance policy. Depending on the wording and circumstances, the insurer may consider eligible malicious or intentional tenant damage, less any applicable excess and bond amounts, and may also consider loss of rent while repairs are carried out.
Example provided for general illustration only. Cover depends on the insurer, policy wording, limits, exclusions and circumstances of the claim.
Landlords insurance across Australia
RMA Insurance Brokers assists residential investment property owners across rural, regional and metropolitan Australia, from freestanding houses and townhouses to units and rural rental properties.
Regional investment properties can bring additional considerations, including availability of local trades, repair timeframes, rebuilding costs where access or transport adds complexity, and local tenancy conditions that may affect loss-of-rent exposure.
We also work closely with rma network Livestock & Property Agents, and with the farming families, regional businesses and rural communities they work alongside.
Our services are not limited to rma network Members. Any Australian residential property owner can contact RMA Insurance Brokers for assistance with landlords insurance.
Why RMA Insurance Brokers?
Landlords insurance is often arranged at purchase and then renewed automatically. Once a property is tenanted, the exposures change and a standard home policy may no longer be adequate.
RMA Insurance Brokers can help you:
- review building and landlord contents sums insured
- understand how loss of rent and tenant damage sections respond
- identify gaps between a strata policy and a landlords policy
- consider excesses, unoccupancy conditions and furnished tenancy exposures
- align cover where a property is part of a broader farm or business arrangement
- assist with notifications and claims after an event
The insurer remains responsible for determining claim entitlement under the policy.
Frequently asked questions
What does landlords insurance cover?
Depending on the policy, landlords insurance may cover the residential building, landlord-owned contents and fittings, loss of rental income, tenant-related damage, and legal liability arising from the property. Each insurer structures these sections differently, with varying limits, conditions and exclusions.
Is tenant damage covered by landlords insurance?
Some policies cover certain types of tenant damage, including malicious damage, while accidental damage or normal wear and tear may be excluded. Bond, tenancy agreements and evidence requirements can also affect whether an insurer accepts a claim. It is worth checking the wording before a tenancy begins.
Does landlords insurance cover loss of rent?
Loss of rent cover may be available where the property becomes uninhabitable after an insured event, or where a tenant defaults or breaks the lease, depending on the policy. Waiting periods, limits, proof of loss and tenant documentation requirements usually apply.
Do I need landlords insurance if I have a property manager?
A property manager handles tenancy administration and inspections, but they do not replace insurance. The owner remains exposed to property damage, loss of income and liability claims. Landlords insurance is arranged by the owner to protect those interests.
What is the difference between landlords insurance and home insurance?
Home and contents insurance is designed for owner-occupied properties and generally excludes or limits rental-related exposures. Landlords insurance is arranged for investment properties and can include cover for tenant damage, loss of rent and landlord-specific liability that a domestic policy may not address.
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RMA Insurance Brokers support for clients managing insurance claims and insurer communications.
Review your landlords insurance
Rebuilding costs move, tenancies change and insurer wordings can change over time. The cover arranged when the property was purchased may no longer reflect the rental property today.
RMA Insurance Brokers can help you review whether your landlords insurance still matches your investment property and your tenancy arrangements.
The information on this page is general information only and does not take into account your objectives, financial situation or needs. Cover is subject to the terms, conditions, limits and exclusions of the relevant policy. Insurance products and available cover vary between insurers. Please review the relevant policy documentation and obtain advice appropriate to your circumstances before making a decision.