*iSelect does not compare to all home and contents insurers in the market. The availability of policies may change from time to time. Not all policies made available from iSelect’s providers are compared by iSelect and due to commercial arrangements, area or availability, not all policies compared by iSelect will be available to all customers. See below for our range of home and contents insurers. Some policies are only available from iSelect’s call centre or online. Our advice on this website is of general nature and does not consider your situation or needs. Consider if any advice is appropriate for you before acting on it. Learn more.
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So you want to be a landlord? Smart!
You’re probably thinking that investment properties can be a great way to earn extra money or help pay off a mortgage. You’re probably not thinking about what could happen if your tenants caused serious damage to your property, or suddenly abandon it, leaving you with the cost of removing their things and finding new tenants.
How to choose a Landlord Insurance policy
If you’ve read this far, you probably understand that not all landlord insurance policies are created equal. So before you commit, it’s a good idea to compare policies.
Landlord insurance explained, with iSelect.
Learn more about how Landlord insurance works in this short video.
Different factors can impact the cost of your policy. Before you get a landlord insurance quote, it may be beneficial to consider the following
Level of insurance
you may only decide to cover the risk of physical damage to your property. However if you’re furnishing the property, you might consider adding contents insurance to your policy. Keep in mind that items like carpets, curtains, and appliances are considered furnishings.
Location
If your property is located in an area with a lot of crime, or one that’s prone to flooding, it could impact the cost of your policy. You can call your local council to find out if your property is located in a flood, fire or cyclone zone.
Pets
You could have the most responsible tenants in the world, but if they have a pet, the risk of damage goes up. So if you rent out a property and the owners have pets, it could impact the cost of your policy.
Specific risks
if your property is at a higher risk for flooding, bushfires, or other disasters that can cause significant damage, your policy could be more expensive.
Frequently Asked Questions
What is Landlord Insurance?
But my tenants pay a bond. How is this different?
Requiring tenants to pay a bond is standard practice in Australia. In most states, a bond is often equal to four months of rent. In many cases, tenants will leave their property without significant damage, or with small damages that can be covered by the cost of the bond. But in the case of major damage, that bond money could be eaten up very quickly. Plus, if repairs take more than a few weeks, you could miss out on incoming rent. Landlords insurance could provide additional financing to help with repairs that exceed bond payments and could help to pay missed rental income. This help could be the crucial difference that keeps you on top of mortgage payments.
How much can it cost?
Different factors can impact the cost of your policy. Before you get a landlord insurance quote, it may be beneficial to consider the following:
- Level of insurance: you may only decide to cover the risk of physical damage to your property. However if you’re furnishing the property, you might consider adding contents insurance to your policy. Keep in mind that items like carpets, curtains, and appliances are considered furnishings.
- Pets: You could have the most responsible tenants in the world, but if they have a pet, the risk of damage goes up. So if you rent out a property and the owners have pets, it could impact the cost of your policy;
- Specific risks: if your property is at a higher risk for flooding, bushfires, or other disasters that can cause significant damage, your policy could be more expensive;
- Who is covered: Depending on your policy, you may be able to choose to cover just your tenants, or your tenants and their guests. If only your tenants are covered, any damage or theft by the people they invite into the home won’t be covered;
- Location: If your property is located in an area with a lot of crime, or one that’s prone to flooding, it could impact the cost of your policy. You can call your local council to find out if your property is located in a flood, fire or cyclone zone.
It’s important to remember that, as with most insurance, the cheapest policy may not be the best. For example, if you’re worried about your home flooding, it could save you money down the track to include that type of protection in your plan. Before you commit to a plan, you should read the Product Disclosure Statement which will outline the details of your policy.
What isn’t typically covered by landlord insurance?
Your policy will likely come with exclusions which will be outlined in the Product Disclosure Statement. These will depend on the level of cover you choose and your policy. Typical exclusions on a landlord insurance policy can include:
- Malicious damage (potentially due to the impact of COVID-19)
- Tenant default (potentially due to the impact of COVID-19)
- Movement of the sea;
- Falling trees;
- Vermin;
- War and uprising.
What about short-term properties?
If there is risk associated with renting out your property for long-term leases, you can only imagine the potential risk of renting out to dozens (or even hundreds) of people every year. Homeowners who use sites like AirBnB, Stayz, and Flatmates.com.au to rent their homes to people on holiday or in need of a place to crash in the short term are also candidates for landlords insurance. It’s likely you will need to disclose this to your chosen insurer.
Does it differ by state?
Absolutely. Before you start comparing insurance policies, get to know how Landlords Insurance works in your state:
How can I get the most out of my policy?
If you’ve ever rented a property, you know that some landlords are better than others. Being a good landlord isn’t just good for the tenants, it can also help you maximise the return on your investment property and maximise your landlord insurance policy. Here are a few helpful tips on how to do just that:
- Communicate: keep the lines of communication open and make sure your tenants feel like they can talk to you if something isn’t looking right.
- Conduct Inspections: talking is great, but it’s important to see your property in-person from time to time. Just make sure you’re not showing up unannounced or violating other consumer laws.
- Keep reports: taking photographs between tenants and keeping a log of any issues will help your case if issues do arise.
- Screen tenants: before you let someone move in, check their references and look into their rental history for any red flags.
Having a landlord insurance policy before you start renting it out could be beneficial, as damage done to your property before it’s insured likely will not be covered.
How to choose a Landlord Insurance policy
If you’ve read this far, you probably understand that not all landlord insurance policies are created equal. So before you commit, it’s a good idea to compare policies. At iSelect we’re here to help! With our comparison service you can compare landlord insurance and other kinds of home insurance from our range of policies, and even switch policies, all at no added cost to you.
Last updated: 23/06/2021