Landlord insurance is cover built for rental properties, and it pays for the things a standard home policy leaves out: lost rent, tenant-caused damage, and your legal liability as a landlord. If you own a property someone else lives in, this is the policy that stands between you and a very bad month.
Plenty of investors assume their building cover does the heavy lifting. It does not. A normal home and contents policy is written for an owner-occupier, and once a tenant moves in, the risks change shape. That gap is exactly what landlord insurance is designed to fill.
What landlord insurance actually covers
The headline feature is loss of rent. If a tenant stops paying, breaks the lease, or the property becomes untenantable after an insured event, a landlord policy can cover the rental income you would otherwise lose. For an investor relying on rent to meet a mortgage, that is the difference between an inconvenience and a genuine cash-flow hole.
Beyond rent, most policies bundle together a few core protections:
- Loss of rent: tenant default, lease break, or an untenantable property after an insured event such as a fire or storm.
- Tenant-caused damage: malicious or deliberate damage by a tenant or their guests, which is usually excluded from standard home cover.
- Landlord liability: if someone is injured at the property and you are found responsible, liability cover handles the legal and compensation costs.
- Building and some contents: the structure, plus fixtures and fittings you provide like carpets, blinds and appliances.
That last point trips people up. Landlord insurance typically covers the building and the items you own inside it, but not the tenant’s own belongings. The tenant insures their own contents, and you insure yours.
How it differs from standard home insurance
The easiest way to think about it: home insurance protects a home you live in, landlord insurance protects a home someone rents from you. The hazards are different, so the policies are different.
A standard home and contents policy generally will not pay out for rent you never received, and it usually excludes deliberate damage by a tenant. Those are the two scenarios that hurt investors most, and they are precisely the gaps landlord cover closes. If you want a refresher on how everyday home cover is structured first, our guide to home insurance in Australia walks through the basics.
Home insurance protects the roof over your head. Landlord insurance protects the income under your tenant’s.
It is also worth knowing that telling your insurer the property is tenanted is not optional. If you rent out a home on a policy written for an owner-occupier, a claim can be reduced or refused. When the use of the property changes, the policy has to change with it.
What it costs, and the tax angle
Landlord insurance is one of the cheaper line items in an investment property budget. Premiums vary by state, property type, value and the level of cover, so there is no single national figure worth quoting. As a rule, though, the annual premium is small set against the cost of a single bad tenant or a long vacancy.
Here is the part investors tend to like: premiums on a landlord policy are generally tax-deductible against your rental income, because the cover is an expense incurred in earning that income. That softens the real cost further. The deduction sits alongside other ownership costs in the broader picture of property returns, and if you want to see how those costs interact, our explainer on negative gearing explained sets out the mechanics.
Before you commit to any property, it pays to research the numbers on an investment property so insurance, rates, strata and maintenance all sit inside a realistic budget rather than coming as a surprise.
| Cover type | Standard home insurance | Landlord insurance |
|---|---|---|
| Building and owner’s fixtures | Yes | Yes |
| Tenant’s own belongings | No | No (tenant insures these) |
| Loss of rent | No | Often included |
| Malicious or deliberate tenant damage | Usually no | Often included |
| Landlord liability | Limited | Yes |
Treat the table as a general guide rather than gospel. Inclusions differ between insurers and between policy tiers, so read the product disclosure statement for the specific policy in front of you. Figures and inclusions last checked June 2026.
What to compare before you buy
Not all landlord policies are equal, and the differences hide in the detail. Two areas deserve a close read.
First, rent default. Check how many weeks of rent the policy will pay, what triggers a claim, and what evidence you need, such as a formal lease and records of arrears. A policy that covers rent default in name but caps it tightly may not stretch as far as you expect.
Second, malicious or tenant-caused damage. Confirm whether the cover includes deliberate damage as well as accidental, and look at the excess that applies. This is the cover most likely to be tested, so it is the cover most worth getting right.
A few practical pointers:
- Match the building sum insured to the rebuild cost, not the market value or what you paid.
- Keep a written lease and a thorough entry condition report, since claims lean heavily on documentation.
- If the property is in a strata scheme, check what the body corporate already insures so you are not paying twice for the structure.
- Review the policy when your circumstances change, for instance if the property sits vacant between tenants for an extended period.
If you are still at the buying stage, weighing insurance early is part of doing the sums properly. Our walkthrough on how to buy an investment property covers where cover fits in the wider checklist.
A quick note on advice
This article is general information only. It is not personal financial, tax or legal advice, and it does not account for your particular situation. Rates, thresholds, policy inclusions and tax rules change, so confirm the detail with the official source: the relevant insurer’s product disclosure statement, and the ATO or a registered tax agent for anything to do with deductions. When in doubt, ask before you sign.
The bottom line
Landlord insurance exists to cover the risks an ordinary home policy does not: lost rent, tenant-caused damage, and your liability as a landlord. For a relatively small, often tax-deductible premium, it protects the income an investment property is meant to produce. Compare the rent default and malicious damage cover specifically, read the product disclosure statement, and confirm the figures with your insurer and the ATO before you rely on them. It is a small cost for a large amount of peace of mind.