What is Landlord Insurance?

An investment property is a valuable asset. However, it’s important to ensure your investment is protected from unforeseen accidents and bad tenants. Canstar explains landlord insurance and why you need it in this handy guide.

What is landlord insurance?

Landlord insurance is a specialised type of insurance designed to assist property owners who rent out their homes or businesses. It’s intended to address the various issues and risks that landlords may encounter when dealing with tenants, ensuring that landlords have financial protection when problems arise with their rental properties.

What does landlord insurance cover?

Landlord insurance typically covers loss or damage to an investment property and furnishings. Some landlord insurance covers unpaid rent from troublesome tenants, or methamphetamine contamination cover, which can be valuable. Landlord insurance typically covers:

  • Sudden and accidental damage – e.g. a leaking dishwasher or accidental damage caused by tenants
  • Lost rent
  • Hidden gradual damage – e.g. damage caused by leaking internal water pipes
  • Methamphetamine contamination
  • Accidental damage to someone else’s property – sometimes including tenant’s contents
  • Natural disaster – if your rental is damaged or destroyed by a natural disaster
  • Removal of debris – covers the costs of demolition, debris removal and disposal when parts of your home are damaged
  • Lock replacement – if your tenant leaves the property before the end of the tenancy agreement and doesn’t return the keys

Intended as a guide only. Cover can vary between policies.

Optional extras

Some insurers offer optional extras for landlord insurance policies. These are typically not covered under the base landlord insurance policy and cost extra. Optional extras can include:

  • Theft or deliberate damage by tenants
  • Landlord’s contents cover
  • Tenants vacating without notice

→Related article: How Does Renters Insurance Work in NZ?

What doesn’t landlord insurance cover?

Landlord insurance typically does not cover certain situations and items. What it doesn’t cover can vary between insurance policies, but common exclusions may include:

  • Existing damage – costs arising from an loss that happened before your policy started
  • Undamaged property – e.g. the cost of painting an undamaged area
  • Pests and pets – e.g. damage caused by insects, rodents and other pests, or damage caused by domestic pets
  • Faulty workmanship – e.g. any structural defect caused by faulty design or workmanship
  • Cleaning or restoration – e.g. loss caused by inappropriate materials/methods used during cleaning or restoration

How is home and contents insurance different to landlord insurance?

Home and contents insurance is designed for homeowners and focuses on protecting a home owner’s property and personal belongings. Landlord insurance, on the other hand, is intended for property owners who rent out their properties and addresses the unique risks and challenges of property management, including loss of rental income and tenant-related issues. It’s essential to choose the right insurance type based on your specific circumstances and whether you are an owner-occupier or a landlord.

Related article: What Does Home Insurance Cover?

Do I need landlord insurance?

Yes! It is recommended that everyone who owns a rental property should take out landlord insurance. While there’s no legal requirement to have landlord insurance, having cover can protect you against situations that would otherwise put you out of pocket.

When renting out your property, you want to make sure it’s well protected. While it would be nice to assume that your tenants will treat your property as carefully as you would, you can never be certain that everything will go 100% according to plan.

By covering yourself with landlord’s protection insurance, you can save yourself a great deal of time, money and stress in the long run.

Compare home and contents insurance with Canstar

About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.

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