As a landlord you may have to replace items stolen or damaged by tenants. Landlord insurance can protect your investment property in much the same way as you protect your own home.

Give me the main points

  • You can insure your home and contents against loss or damage caused by events such as fire, theft and storm.
  • Landlord insurance even covers you if your tenants deliberately damage your property.
  • You have the option of cover for Rent Default and Theft by your tenant.

When reviewing a rental application you’re hoping to choose the perfect tenant. The one that treats your home like their own and pays rent on time.

But that might not always be the case. Even ideal tenants could lose their job, get injured or have their work hours reduced. So it makes financial sense to protect your investment property with landlord’s insurance.

Losing your rental income

This type of insurance can cover you for loss of rent if your tenant doesn’t ‎pay. You’re only covered if you still have a mortgage on the property, not if you own it outright.

So if your tenant packs up and leaves without notice or they die, your rent default will be paid (up to the amounts or limits set out in the Policy terms). You might also be covered for legal ‎expenses incurred to recover the rent owed.

This loss of rental income cover is optional and costs extra.

Covering your contents

You can insure the contents you’ve left for your tenants to use. You'll be covered for the damage caused by your tenants or replacement costs if they’re stolen.

Protecting your investment property

Nature is unpredictable and has a way of reminding us through crazy storms or life threatening fires. If this happens, and you have building cover you’ll be covered for any damage caused by these types of natural disasters.

Including landlord insurance into your budget

It might seem like another expense added to your budget plan but remember it’s a tax deductible expense*. If you’re new to budget plans, our articles Budgeting 101 and Budgeting 102 explains how to put a plan together. Plus it covers you for large unexpected costs that are probably not in your budget.

* As taxation legislation is complex, we recommend you contact your financial adviser, tax adviser or the Australian Taxation Office for further details and expert advice in relation to your personal circumstances.

For instance, a couple of month’s lost rent could cost $2,600. A new couch $500 and a broken window from storm damage another $500. This total cost of $3,600 is probably higher than the cost of taking out landlord’s insurance.

When reviewing a rental application you’re hoping to choose the perfect tenant—the one that treats your home like their own and pays rent on time.

But that might not always be the case. Even ideal tenants could lose their job, get injured or have their work hours reduced and end up not being able to pay the rent. So it makes financial sense to protect your investment property with landlord insurance and to consider the optional additional cover for Rent Default and Theft by Tenant.

Losing your rental income

This type of insurance can cover you for loss of rent if your tenant doesn’t ‎pay. You’re only covered if you still have a mortgage on the property, not if you own it outright.

So if your tenant packs up and leaves without notice or they die, your rent will be paid (up to the amounts or limits set out in the Policy terms). You might also be covered for associated legal ‎expenses. You can also insure the contents you’ve left for your tenants to use to cover in the event that they steal your possessions.

The loss of rental income and theft by tenant covers are optional and costs extra.

Protecting your investment property

Nature is unpredictable and has a way of reminding us through crazy storms or life-threatening fires. If this happens, and you have building cover you’ll be covered for any damage caused by these types of natural disasters.

Including landlord insurance into your budget

It might seem like another expense to add to your budget plan but remember it’s a tax-deductible expense*. If you’re new to budget plans, our articles Budgeting 101 and Budgeting 102 explain how to put a plan together. Plus it covers you for potential large unexpected costs that are probably not in your budget.

For instance, a couple of month’s lost rent could cost $2,600. A new couch $500 and a broken window from storm damage another $500. This total cost of $3,600 is probably higher than the cost of taking out landlord’s insurance. You'll find that the adequate amount of insurance cover will cost you significantly less than the total replacement value.

* As taxation legislation is complex, we recommend you contact your financial adviser, tax adviser or the Australian Taxation Office for further details and expert advice in relation to your personal circumstances.

This article is intended to provide general information only and has been prepared by NAB without taking into account any particular person's objectives, financial situation or needs and is current as at 31/3/2015. Before acting on any of this information you should consider the appropriateness of it information having regard to your personal objectives, financial situation or needs, Terms, conditions, limits and exclusions apply to an insurance policy, so before making a decision about insurance consider the relevant Product Disclosure Statement for it available from the insurer. The information does not constitute comprehensive taxation guide. As taxation legislation is complex, we recommend you contact your financial adviser, tax adviser or the Australian Taxation Office for further details and expert advice in relation to your personal circumstances.

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