Landlord insurance can be complicated and confusing. Sometimes it appears to only offer coverage in very specific circumstances, which can be quickly undone by technicalities. To help better understand it, we chatted to our friends at EBM RentCover (one of Australia’s leading landlord insurance specialists) to determine whether Landlord Insurance is a ‘nice to have’ or a ‘necessity’. We’ll let you be the judge…

What does landlord insurance cover?

Landlord insurance often covers four main areas: tenant damage and loss of rent, contents insurance, building cover and legal liability. Depending on the property and circumstances, you may need a policy that covers ALL or only some of these areas.  

What doesn’t it cover?

Landlord insurance doesn’t cover every possible situation as the overload in risk would make insurance unaffordable. Insurers need to strike a balance between providing cover for the most common and most significant eventualities, while keeping their level of risk at a manageable level. These are some of the risks typically NOT covered by landlord insurance:

• run-of-the-mill expenses
• tenant repairs
• wear and tear
• mould
• building defects
• tenant contents
• market conditions.

For a more information on the items of this list, click here. Refer to the relevant product disclosure statement (PDS) for a full list of what is not covered by an insurance policy.

Is insurance worth it?

Homeowners should consider what would happen if their property was severely damaged or destroyed by a fire. Without insurance, they would be left to cover the rebuilding or replacement costs themselves. With insurance, they have a financial safety net for many of the significant risks homeowners may face.

Do you have an example of insurance stepping in to help?

A car lost control and travelled through the fence and lounge room and kitchen walls of an EBM RentCover client. An assessor was appointed urgently after hours, and the tenants had to vacate as the property was deemed uninhabitable. EBM RentCover paid out a total of $51,416.31 to repair damage and replace contents and covered the loss of rent while the tenant was unable to occupy the property throughout the repairs.

EBM RentCover insurance covered the event and returned the client back to the position before the accident. The insurance covered the lost rent, keeping the client afloat until the property was habitable. Without insurance, the landlord would need to pursue the driver for the loss and damage themselves. The worst-case scenario would be the driver was not covered by their car insurance and had no funds to pay for the damage, leaving the landlord to foot the loss and damage bill and lost rent out of their own pocket.

What policies are available through EBM RentCover?

Our RentCover Ultra (landlord and contents insurance) offers protection not typically covered in standard contents policies and includes cover for insured events (such as fire, storm and flood) to contents, loss of rent, pet damage, liability and tenant related damage. It is designed for apartments, units, townhouses and villas where the building is already covered by body corporate or strata insurance, or standalone homes where the building is insured elsewhere.

Meanwhile, our RentCover Platinum (landlords, contents and building insurance) policy protects properties inside and out, with cover for insured events (such as fire, storm and flood) to both contents and building, loss of rent, pet damage, liability and tenant-related damage. It is designed for standalone homes and townhouses that can be insured separately and need cover from the driveway to the backyard. And, for those who prefer their contents and building insurance combined under one policy.

We also offer RentCover ShortTerm (landlord, contents and optional building cover) which is designed for properties rented out for less than six months at a time, including holiday homes, Airbnb accommodation and serviced apartments.

Where can you find more information?

The website is a one-stop-shop for your landlord insurance needs. It can be found at RentCover.com.au. Or call the friendly team on 1800 661 662 with any questions or queries.

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.