INSURING YOUR HOME

What’s the difference between Landlord Insurance and Home Insurance?

19 October 2021

Home Insurance helps cover the costs of repairing or rebuilding your home if it’s damaged in an insured event, like fire (including bushfire), flood, or burglary. Landlord Insurance is similar, but also includes cover for landlord-specific things like loss of rent and malicious damage caused by tenants.

The features of Landlord Insurance vs Home Insurance

Both Home and Landlord Insurance may cover you in case of events like flood, storm, and fire (including bushfire). But insurance designed for landlords may also cover you for:

theft, vandalism, and malicious damage by tenants or guests
accidental glass breakage
up to $20 million legal liability for death or injury to other people, or loss or damage to their property
loss of rent when the tenant on your lease agreement defaults, and
legal costs to recover unpaid rent.

The last two are particularly important when it comes to maintaining the return on investment for your property. Chasing up unpaid rent can be time consuming, but the right cover can help. Check the Product Disclosure Statement for all the terms, conditions, limits and exclusions that apply.

00:01 Meet Taylor.

00:02 Taylor has just rented out her investment property to the Patels.

00:07 Congratulations Taylor, you’re officially a landlord!

00:11 So she’d like to learn a little more about Landlord Insurance

00:16 First, Taylor would like to know what Landlord Insurance covers.

00:22 GIO Landlord Insurance offers new for old replacement

00:25 and Taylor can get cover for certain situations.*

00:29 This can include loss or damage from insured events like storm,

00:33 flood, and fire including bushfire, but not within the first 72 hours of cover.

00:39 She may also be covered for insured events like theft, vandalism, and malicious acts of vandalism

00:46 as well as accidental breakage of glass if they fall within the policy terms**.

00:51 She can even be covered for legal liability up to $20 million.

00:57 Taylor thinks that kind of cover would be great for peace of mind...

01:01 but it sounds a lot like Home Insurance. Are they the same thing?

01:07 Great question! While there can be crossover, Home Insurance and Landlord Insurance have

01:12 some important differences, which would ultimately depend of the policy wording.

01:17 Taylor would generally look at landlord insurance instead of home insurance

01:22 because the property she is looking at insuring is not being occupied by her.

01:27 So, what are some of the differences between the two?

01:32 Unlike Landlord Insurance, Home Insurance normally doesn’t include things like loss

01:37 of rent and tenant default. It also ordinarily wouldn’t cover Taylor’s

01:40 property for malicious acts caused by tenants.

01:44 So, does Taylor have to take out Landlord Insurance?

01:48 No, it’s not required by law. But certain lenders may require their customers to have it

01:54 when they take out a mortgage on a property. You should check with your

01:57 lender and make your own enquiries. Finally, Taylor is wondering whether

02:04 she can claim Landlord Insurance as an expense on her tax return.

02:09 Generally speaking, landlords can claim Landlord Insurance as a deduction at tax time however you

02:15 should seek your own advice from an accountant or the Australian Taxation Office on this point.

02:22 Make sure to read the Product Disclosure Statement when considering this product. To get a

02:26 Landlord Insurance quote, head to gio.com.au. You’ll also find some handy information and

02:34 tips about Landlord Insurance on our GIO Know More blog.

Can Landlord Insurance cover you for damage caused by tenants?

In most cases, you’ll have cover for malicious damage caused by tenants and their guests. Your tenant or tenants must be subject to a rental agreement. If you’re giving your nephew and his girlfriend cheap rent without a rental agreement in place, then you won’t be covered.

Don’t forget, an excess may be payable in the event of damage caused by tenants or their guests too. Costs won’t be covered if the damage was accidental or unintended. Same for costs associated with cleaning, repairing, and removing odours, stains, and rubbish. Check the Product Disclosure Statement for all the terms, conditions, limits and exclusions here.

Coverage options for Landlord Insurance

You can typically choose from three options when it comes to Landlord Insurance:

Landlord Property Insurance, which covers your building and permanent fixtures and fittings.
Landlord Contents Insurance, which covers your property's furnishings including carpets and blinds.
Landlord Property & Contents Insurance, which combines the above.

With GIO, options 1 and 3 include Safety net protection. If you have to repair or rebuild and the cost of doing so exceeds the sum you’re insured for, then GIO will pay up to a further 25% of the building sum insured. All options include tenant default cover and the costs to recover it (up to $5,000). Read the Product Disclosure Statement for details.

Cover for loss of rental income with Landlord Insurance

Hopefully you have reliable tenants. But take comfort knowing you’re covered with GIO Landlord Insurance in the event of malicious damage caused by your tenants. Not only that, you may be able to claim rental income in the event that your tenants default on rent payments. There are terms, limits and conditions that apply, so read the Product Disclosure Statement for more details.

You’ve worked hard to buy your investment property, so consider giving your asset the cover it deserves.

Explore Landlord Insurance with GIO today

Insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Read the Product Disclosure Statement before buying this insurance. Target Market Determination also available.

This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.

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