What is Landlord insurance?
Like home insurance, landlord insurance can cover your rental property and its contents against risks like storms, floods and fire. It can also cover the damage that tenants can cause to your contents – and even loss of rental income.
Unlike some landlord policies, Steadfast landlord insurance can cover holiday rentals and long-term rentals.
Who should consider it?
Without landlord insurance, you could lose your valuable investment if it’s damaged or destroyed.
You could also lose income from rent if you’re unable to rent it out during repairs, or if your tenants get evicted or break their lease.
“Landlord insurance is designed to cover the cost of replacement or repair needed when certain events occur that damage your residential investment property. It can also cover any contents you provide for your tenant’s use that could leave you out of pocket.”
Allianz, Landlord Insurance, 2022
Coverage may include
The exact cover you can receive depends on the policy that you take out. But to give you an idea, here are some of the benefits a Steadfast landlord insurance policy may include:
| Potential Benefits | |
|---|---|
| Automatic cover for flood and fire or explosion. | Automatic inflation adjustment if you need to make a buildings or contents claim. |
| Liability cover of up to $20 million for injury or loss of life to a third party, or loss of a third party’s property on a building you own. | Cover for loss or damage caused by tenants or their visitors(exclusions apply). |
| Automatic cover up to $10,000 for damage to landlord’s contents – and the option to increase cover for greater amounts. | Cover for loss or damage caused by electric motor burnout for appliances up to 15 years of age. |
| Catastrophe cover up to an additional 15% of the building sum insured, for declared natural disasters. | Tax audit cover (cover options of $2,000 or $5,000). |
| Optional cover for loss of rent or an absconding tenant. | Up to an additional 15% of the building’s total sum insured, to cover demolition and removal of debris, and architects and engineering fees. |
| Coverage for malicious damage caused by tenants. | Automatically covered by Steadfast policies. |
What usually isn’t covered?
Generally your policy won’t cover:
- Damage from tenant carelessness or neglect.
- Rust, corrosion, gradual deterioration or wear and tear.
- Your home if it is unoccupied for 90 continuous days.
Other exclusions may apply.
Case Study
Janet and Ross bought an investment property in Sydney’s inner west. They relied on the rent from the property to help cover their mortgage repayments. One year, they rented the property to some tenants who caused extensive damage and then left owing 12 weeks’ rent. Because the property needed repairs, Janet and Ross were unable to rent it out immediately.
Fortunately, the couple had taken out landlord’s insurance and included the rent default option*. They successfully claimed on their insurance to cover their repair costs – and just as importantly, their missing rent. This allowed them to make their mortgage repayments and repair the property quickly so they could get new tenants in.
