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Landlord Insurance in New South Wales
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Written by
Kervin Mathew
Edited by
Ellie Garran
Reviewed by
Adrian BennettOur range of Home and Contents partners
iSelect does not compare all providers in the market or all policies offered by our partners in your area. Not all policies or special offers are available to all customers and some may only be available over the phone or on the website. Learn more.
What is landlord insurance?
Like home and contents insurance, landlord insurance exists for when the unexpected happens and you’re left to deal with damaged property, lost rental income, and whatever bad luck chooses to throw your way. Essentially, landlord insurance helps minimise financial damage, takes some of the risk out of your property investment and, ultimately, gives you peace of mind.
Is landlord insurance mandatory in NSW?
Landlord insurance isn’t a must in NSW (or anywhere else in Australia). But being a landlord can be a nailbiter, especially when you consider the implications of tenancy and rental laws, maintaining the safety and liveability of your property, and rental market movements.
If you choose to be an investment property owner, you likely understand the worth of it all. In the same vein, the benefit of protecting your investment from some of the things you can’t control might make landlord insurance worthwhile.
What does landlord insurance commonly cover in NSW?
Insurers tend to not stray too far from the herd when it comes to the types of landlord insurance policies they offer. You have your run-of-the-mill:
- landlord building insurance to help cover damage to the structural aspects of your property including garages and sheds
- landlord contents insurance to help cover loss or damage to your belongings within your rental property
- combined landlord building and contents insurance to help cover your property and belongings.
Coverage from some events such as floods or tenant default may need to be included as extras. Read through each policy’s PDS to get into the specifics of insured events and what’s covered, as these may vary between insurers.
Here are some typical landlord situations where insurance can have you covered.
Loss of rent
If your property is under repair and unliveable for a certain period due to damage, landlord insurance might cover you, up to a specified limit, for any rent you may lose before it’s ready for tenancy.
Damage or theft by tenants or their guests
An unattended stove or overexcited pet can cause accidental damage. Tenants or their guests could also cause malicious damage or steal from your property. Landlord insurance can help cover the loss or damage caused.
Tenant default or lease break
Your tenant may miss rent or break their lease before it expires. Landlord insurance can cover your losses up to a specified limit.
Legal expenses
Your policy could cover lawyer fees, tribunal fees and other accompanying expenses such as agent fees in cases involving tenant disputes. Keep in mind, insurers may offer different limits to how much can be covered.
Explosions
Explosions can result in earth movements such as subsidence (sinking land) or mudslides, which can cause significant property damage. Having the right landlord insurance could help dig you out of this hole.
How do NSW rental laws affect landlords?
NSW has its own set of rules and guidance to help identify the rights and obligations related to renting, tenancy and landlords.1For more information, see NSW Government – Rules and guidance for housing and construction
Domestic violence
If they’re escaping domestic violence, your tenant can break their lease immediately without needing to pay the mandatory break fees.
Renting with pets
If you consent to your tenant keeping a pet at the property, you can’t ask for a higher rental rate or deposit to help repair the damage said pet could cause to the property.
Minor changes to property
You can’t refuse tenants’ requests to make minor changes to a rental, such as hammering nails into walls or installing phone and internet access lines.
What factors determine landlord insurance premiums in NSW?
Insurers can look at scores of factors, most of which circle around the risk associated with a property. Here are some of them.
How much rent you charge
Landlord insurance is meant to cover loss of rental income. The more rent you charge, the more you’re likely to claim, which in turn can affect your premiums.
Crime rate in the area
Your property might reside in a suburb or general area with a higher occurrence of crimes like burglary or vandalism. This can increase your property’s risk profile.
The east coast’s extreme weather
Australia’s east coast can sometimes cook up quite the storm. The frequency of natural disasters like cyclones and bushfires can lead to higher premiums, especially in higher risk areas.
How much excess you pay
An excess is the amount you choose to pay whenever you make a claim. Some insurers can offer a lower premium if you choose to pay a higher excess.
Pros and cons of landlord insurance
| Pros | Cons |
| Can help protect your investment | May mean having multiple insurance premiums to pay |
| Can limit lost rent | Exclusions and limits can apply |
| Tax deductible | Might already be covered by building insurance |
Helpful tip:
If your property is left vacant, it still makes sense to have it insured. Anyone who’s injured or has something they own damaged on your property can make a claim against you. With landlord insurance, not only could you get covered for loss of rental income, you could also get up to $20 million in legal liability coverage.
Adrian Bennett
General Manager for General Insurance at iSelect
Frequently asked questions
What contents and fixtures might landlord insurance cover?
Landlord contents insurance is particularly useful when you have items that you own and are legally responsible for on your rental property. These can include:
- carpets and loose floor coverings
- furnishings and furniture
- curtains and internal blinds
- suitcases
- portable swimming pools, saunas and spas
- tools and equipment
- pot plants
Though the name suggests otherwise, landlord building insurance might also be able to cover fixed domestic appliances that are connected to your utilities; think hot water systems, air conditioners, ovens, dishwashers and even solar panels.
What might landlord insurance in NSW not cover?
As you’re comparing landlord insurance, you might notice some further common ground between policies. This time it’s what they don’t cover, like:
- Tenants’ personal belongings: While they can keep their possessions in your property, tenants will need to get their own insurance to cover their furniture, electronics, clothing and so on.
- Multiple instances of theft or damage: If, for whatever reason, your tenant or their visitors steal from your property or damage it repeatedly, you can’t make multiple of these claims on the same lease agreement. Instead, you might need to seek other ways to recover the loss, as well as looking at solutions to stop these incidents from happening again.
- Flooding: While you can get landlord insurance that covers natural disasters like fire and lightning, floods might not be included alongside them. For that protection, you might need to purchase flood cover. This could definitely be a good idea if you’re in a flood risk area — Australia is the land of ‘droughts and flooding rains’ after all.
Do I need landlord Insurance if I have building Insurance?
Landlord insurance and building insurance are two different types of insurance. Generally:
- Landlord insurance protects you against things like malicious or accidental damage to your rental property by tenants, or lost income from a tenant defaulting on their rent.
- Building insurance covers you for repairs or replacement of your building if it’s damaged or destroyed in certain ways, like from a fire.
However, there can be some crossover with what different policies cover. You might find your property’s building or home insurance includes elements of landlord insurance or you might need to take out an additional policy.
If you’re dealing with a strata property, like an apartment, things can get even murkier. This is because NSW strata owners corporations must have building insurance and public liability insurance. But this might only cover communal areas or shared parts of the building. Further, even if a common property issue damages parts of your rental or the contents, this strata-owned insurance may not apply.
So whether it’s a burst common pipe or a once-in-a-lifetime earthquake, you could be stuck dealing with the financial aftermath – including being unable to lease the property for a time. But if you had both landlord and building insurance, you could get a degree of coverage for the loss of rent along with the damage to the property.
Are landlord insurance premiums tax deductible?
As a rule of thumb, you can claim your landlord insurance premiums on your tax. However, it can only be for the time when your property is genuinely available for rent and for the parts of the property that rent covers. Clear as mud, right? Essentially, it’s probably not a good idea to claim the time you use it as a holiday home or for parts of the house that you still use if you’re only renting out a bedroom.
Does landlord insurance cover tenants’ belongings?
No. Tenants will need to get their own insurance to cover their belongings even though said belongings are kept on your property.
Compare landlord insurance
Slogging your way through PDS after PDS can be a dry way to spend a day. Take a breather and let us do a bit of the heavy lifting by comparing policies for you.
iSelect does not compare all home and contents insurers or policies in the market. The availability of policies may change from time to time. Not all policies 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. Some policies are only available from iSelect’s call centre or website. A number of our participating general insurance brands are arranged by Auto & General Services Pty Ltd ACN 003 617 909 on behalf of Auto & General Insurance Company Limited 111 586 353, both of which are related entities of iSelect Limited. Our relationship with those companies does not impact the integrity of our comparison service. Click here to view iSelect’s range of providers.
iSelect General Pty Ltd ABN 90 131 798 126, AFS Licence Number 334115. Any advice provided by iSelect on this website is of a general nature and does not take into account your objectives, financial situation or needs. You need to consider the appropriateness of any information or general advice iSelect gives you, having regard to your personal situation, before acting on iSelect’s advice or purchasing any policy. You should consider iSelect’s Financial Services Guide which provides information about our services and your rights as a client of iSelect. iSelect receives commission for each policy sold that is a percentage of the premium or a flat fee. Ask us for more details before we provide you with any services.
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- 1.For more information, see NSW Government – Rules and guidance for housing and construction