Landlord Insurance – Q&A

When it comes to renting property, many investors can’t help but ask – is landlord insurance really worth it?

To address this query, we spoke to our team of experts who have all built successful property portfolios to discuss the benefits, risks, insurance types, considerations, costs and most importantly, their recommendations on using landlord insurance when it comes to letting your investment property. Check it out!

What are the benefits of landlord Insurance?

Ultimately, landlord insurance provides investors with total peace of mind in that they will have all damages, ranging from water damage through to lease break/loss of rent, completely covered in the event of any accidental, unavoidable or intentional damage such as COVID-19. In addition, landlords also have the added advantage of knowing that landlord insurance is a complete tax deduction – bonus!

Are there any major risks if an investor chooses not to get it?

Like everything else, by not having insurance landlords run the risk of exposing themselves to damage by the tenant, theft/attempted theft, fire and water damage, legal action against tenants, loss of rent and much more. This also positions the investment as a potential financial liability.

As landlord insurance is a relatively low cost, the team at AllianceCorp highly recommends sourcing landlord insurance to best protect both your property and yourself from any intentional or accidental damages that could otherwise cause significant financial loss.

Is landlord insurance or home and contents insurance a better option?

As outlined above, landlord insurance is a specialist form of home insurance that covers everything normal home insurance does – plus a range of extra protections for problems unique to landlords, such as:

  • Theft and intentional damage by the tenant
  • Loss of rent when your place is damaged
  • Loss of rent if the tenant can’t pay
  • Your legal expenses if you have to evict a tenant

Replacement locks if you have to evict a tenantIn contrast, home insurance covers you if a storm, fire, theft or other insured event damages or destroys your home or its contents. You can typically choose two forms of protection: protection for your home (building insurance) and protection for your belongings (contents insurance). It’s a step down from landlord insurance because that also protects your business; specifically, any issues your tenants may cause.

However, in order to get a loan from the bank, home and contents insurance is often a criteria required by the bank. Different lenders have entirely different requirements depending on the location, building codes, type of home, etc. Mortgage lenders’ primary concern is that your home insurance protects against anything that can damage your (and their) asset.

In summary, landlord is the recommended insurance – but it must be noted that these are two different insurances that are required and cover two different elements.

What should a landlord look for in a reliable landlord insurance policy?

When looking for reliable landlord insurance, you must look at the fine line in terms of the company’s willingness to distribute payment when an insurance claim is lodged. This can be completed online by researching the extent of coverage and how relevant it is for the property you own. For example, the value of chattels.

Do I need landlord insurance, and if so how much?

The only choice a landlord has when it comes to an insurance value is the value of the fixtures and fittings in your property. It is recommended to speak to a property professional (i.e. a builder, tradesperson etc.) regarding the costs of replacing certain materials such as floorboards, or appliances to avoid overpaying for insurance.

In short, is landlord insurance really worth it?

Yes! For a relatively low cost (usually under $500), you will have total peace of mind knowing that you are covered for a broad range of circumstances, be it intentional, accidental, environmental or otherwise. Having the added advantage of insurance being a complete tax deduction for investors is also a fantastic benefit!


  • This field is for validation purposes and should be left unchanged.


Email Subscription

  • This field is for validation purposes and should be left unchanged.