Maintaining a home
Should you consider Landlord Insurance?
1 July 2021
Wondering whether you need Landlord Insurance for your investment property? It‘s worth considering, as it can provide coverage for your investment in situations like:
- theft or burglary by tenants and their guests;
- loss of rent due to tenant default or your tenant cannot live at the property due to damage (for example by a storm or fire); and
- potential liability to pay compensation for death or bodily injury to other people^.
Without Landlord Insurance, you may find that you have to seek payment from the tenant or use their bond money to cover repair costs in the event of malicious damage caused by them or their guests.
You’ve worked hard to obtain an investment property — consider covering it with the level of Landlord Insurance that’s right for you.
What type of Landlord Insurance do I need?
The first decision you’ll need to make is the type of policy. Suncorp Insurance Landlord Insurance can cover:
- the property including the home and its permanent fixtures and fittings;
- the contents within the property that you own or are responsible for; or
Once you’ve chosen your policy type, you might want to look at optional covers you can pay extra for. Optional covers include:
- Accidental damage at the property;
- Motor burnout; and
- Safety net protection.
You can read more about the optional covers on our Landlord Insurance page and by reading the Product Disclosure Statement for more information.
Sam recently bought an investment property
in Townsville, Queensland... and he wants to rent it out.
But he's wondering whether he needs Landlord Insurance.
First, Sam would like to know what it covers...
Suncorp Landlord Insurance offers new for old replacement and Sam can get covered for a range of situations.
This can include loss or damage from insured events, like storm, flood, and fire, including bushfire, but not within the first 72 hours of cover.
He may also be covered for insured events like theft, vandalism, and malicious acts, as well as accidental breakage of glass.
He can even be covered for legal liability, up to $20 million.
Sam thinks that kind of cover will be great for him... but it sounds a lot like Home Insurance.
Are they the same thing?
It's a good question!
While Landlord Insurance and Home and Contents Insurance both provide cover for events like theft and escape of liquid, Landlord Insurance provides some additional layers of cover that aren't included in a standard Home and Contents policy.
So, what are some of the differences between the two?
Unlike Landlord Insurance, Home Insurance normally doesn't include things like theft or burglary by tenants and their guests; loss of rent due to tenant default or because your tenants cannot live at the property due to damage; or legal costs to recover unpaid rent.
Without Landlord Insurance, Sam may have to seek payment from the tenants or use their bond money to cover repair costs in the event of malicious damagecaused by them or their guests.
Sam may find that the tenants' bond is not enough to cover these costs and so it could be out of pocket himself or may even need to take legal action to recover these costs from the tenants, in the event of malicious damage or rent default.
Not that Sam doesn't think the Zhangs will make great tenants, but he has worked hard to buy an investment property and wants that extra piece of mind.
So, what are some benefits of taking out a Landlord Insurance policy for a Queensland investment property owner like Sam?
Sam's investment property is in one of Australia's most disaster-prone areas.
So, it's really important he has cover for insured events, like storms, floods, and cyclones.
Suncorp Insurance claims data shows that Rent Default and Damage by Tenants contributed to almost 22% of all Landlord Insurance claims.
So, to help protect his property from the unpredictable nature of this Queensland location, and some of the risks that come with renting out a property,
Sam thinks Landlord Insurance may be a goer!
So, does Sam have to take out Landlord Insurance?
No, it's not required by law.
But certain lenders may require their customers to have it when they take out a mortgage on a property.
Always check with your lender.
Finally, Sam is wondering whether he can claim Landlord Insurance as an expense on his tax return?
Generally, landlords can claim Landlord Insurance as a deduction at tax time, however you should seek your own advice from an accountant or the Australian Taxation Office.
Make sure to read the Product Disclosure Statement when considering this product.
To get a Landlord Insurance quote, head to suncorp.com.au.
TMD available in the description below.
You'll also find some handy information and tips about Landlord Insurance at Suncorp's Learn About blog.
How much Landlord Insurance do I need?
When you take out or renew a policy, you’ll need to determine a sum insured that is best for you. We offer a range if you are insuring the building. This is the maximum amount we’ll pay to repair or rebuild the property or contents following an insured event.
The sum insured you’ll need can vary depending on factors like the the size of the building and materials used, and what structural improvements you’ve made around the home (like the addition of a water tank or a new veranda).
When should I get Landlord Insurance?
While you can get Landlord Insurance at any time, it can’t be backdated. If you’ve just bought a new investment property, you may find it reassuring to purchase Landlord Insurance , rather than waiting until you have tenants.
How do I choose my Landlord Insurance?
When choosing your Landlord Insurance provider and policy, think about what you’d like to be covered for. There’s a few things to consider:
- Damage caused by natural disasters (is your investment property located in a storm, bushfire or flood-prone area?).
- Damage caused by tenants or their guests.
- Legal liability cover for injuries sustained at your property.
- Legal costs to recover rent owed to you or costs charged by your agent for attending court or a tribunal to attempt to recover unpaid rent.
What if I’m in a unique scenario?
here are some unique scenarios that might necessitate a conversation with your insurer.
- Renting a furnished home. Make sure to check whether your Landlord Insurance covers your contents, and if there are any circumstances in which it won’t.
- Renting out a strata title property. Strata Insurance may be required if your property is located in a strata building, where your rental home shares common property. Legislative requirements vary between states, so do some research to see what applies to your particular situation.
- How you could make a profit from property flipping
- Does your home insurance cover fire damage?
- Does home insurance cover water damage?
^ Conditions apply. See the Product Disclosure Statement for more information.
Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Read the Product Disclosure Statement before buying this insurance. Any information or advice is intended to be of a general nature only and has been prepared without taking into account any person's particular objectives, financial situation or needs. You should make your own enquiries, consider whether advice is appropriate for you and read the relevant Product Information Document before making any decisions about whether to acquire a product.