The Fine Print Australia · PUBLISHED 27 JUN 2026 · VERIFIED 27 JUN 2026 · AU EDITION

40% of Aussie Landlords Have the Wrong Landlord Insurance 🇦🇺

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More than 40% of Australian landlords are unknowingly relying on basic home insurance that typically excludes tenant-related losses like rent default and malicious damage, leaving them personally exposed to thousands of dollars in potential claims.QBE survey of 500 landlords

The number that matters

56% — % — proportion of Australian landlords who have landlord insurance (vs 43% who only hold standard home insurance), highlighting a large cohort likely underinsured for tenant risks — QBE Australia survey, c.2017

How it quietly costs you

Mechanism – confusing home vs landlord cover

• Standard home building/contents insurance usually covers events like storm, fire, theft and liability, but does not cover tenant-caused damage or rent default because the tenant has been allowed into the property with the owner’s permission.
• Landlord insurance is an enhanced form of home insurance specifically for rental properties, adding cover for rent default, loss of rent, and malicious damage by tenants.
• A QBE survey of 500 Australian landlords found 56% have landlord insurance, while 43% only have home insurance, which “may fall short of a landlord’s needs” by excluding key tenant-related risks.

What typical landlord cover includes (when you’ve bought the right product)

• Loss or damage to the rental property building and landlord-owned contents, but not tenant belongings.
• Loss of rental income if the property becomes uninhabitable due to an insured event (e.g. fire, storm) or listed rent default events, with Allianz paying up to $10,000 of lost rent per period of insurance and up to 15 weeks of rent default, often capped at 12 months for damage-related loss of rent.
• Malicious or intentional tenant damage, legal liability if a tenant is injured, and sometimes extras like pet damage or clean‑up costs from illegal drug production.

What many home-only policies exclude

• Tenant-caused damage (malicious or accidental) because that is considered intentional by a person allowed into the property, and therefore outside standard home policy wording.
• Rent default and loss of rent due to tenant behaviour (e.g. abandonment, failure to pay), which are landlord‑only features and often optional extras even within landlord policies.
• Wear and tear, maintenance issues, mould, rot, pests, construction faults and DIY/unauthorised repairs, which are commonly excluded in both home and landlord policies.

Dollar impact: old vs better

To make the gap concrete, consider a typical investment unit in a capital city:

• Assume weekly rent of AUD 550 (modelled figure, consistent with many inner‑city rents but not from a regulator).
• If a tenant stops paying and the property is uninhabitable due to malicious damage for 15 weeks, the landlord loses AUD 8,250 in rent (550 × 15) plus repair costs, which a home‑only policy generally will not cover.
• A landlord policy like Allianz’s would potentially cover up to 15 weeks of rent default and up to AUD 10,000 of lost rent from listed events, as well as malicious damage repairs, meaning the insurance can cover much or all of the AUD 8,250 income hit plus repair bills, whereas a home‑only policy leaves that cost with the landlord.

This is the hidden cost: the 43% of landlords relying on standard home insurance are exposed to multi‑thousand‑dollar tenant and rent losses that specialist landlord cover is explicitly designed to absorb.

The second, compounding trap

Mechanism – exclusions, optional add‑ons and policy voiding

Even landlords who think they’re covered by landlord insurance often miss critical gaps due to:

• Exclusions for wear and tear, neglect and maintenance: insurers like Westpac and Canstar note that general wear and tear, maintenance issues (mould, rot, pest infestation) and construction faults or poor workmanship are typically excluded.
• Optional nature of key protections: cover for rent default/loss of rent and tenant damage is often an extra that must be specifically selected and paid for; Steadfast notes that “if owners want to be covered for loss of rental income they need to choose – and pay extra for – the rent-cover option.”
• Policy voiding conditions: landlord insurance can be voided by:
• Failing to pay premiums on time
• Leaving the property unoccupied for too long
• Failing to contact police in the event of a break‑in
• Having faulty design or poor workmanship on the property

If any of these conditions occur, an otherwise comprehensive policy can be denied at claim time, turning expected cover into an out‑of‑pocket bill.

Quantified cost of inaction

Take a scenario of a poorly understood policy:

• An investor buys landlord insurance but doesn’t add rent default cover, believing standard cover is enough.
• A tenant falls into arrears and stops paying for 20 weeks before eviction and re‑letting. At AUD 550 per week, the landlord loses AUD 11,000 in unpaid rent (550 × 20), which is not covered because rent default was an optional extra they didn’t purchase.
• Some policies will pay up to 12 months of loss of rent when the property is uninhabitable due to insured physical damage, but not just because a tenant fails to pay; that distinction is easily missed and leaves AUD 11,000 directly on the landlord.

Add a second layer:

• If the property is left unoccupied beyond the allowed period (often specified in the policy, e.g. 60–90 days – not in the search results, so this is general industry practice), the insurer can void cover for any losses occurring while vacant.
• Suppose a vacant property suffers storm damage costing AUD 25,000 to repair (modelled figure), but the policy is voided because the landlord breached the unoccupancy condition or failed to contact police after a prior break‑in; that AUD 25,000 becomes an uncovered expense.

Over an ownership horizon, landlords who don’t actively check and add key options, and don’t comply with voiding conditions face tens of thousands of dollars in potential losses they assume are insured but are not, solely because of exclusions and policy structure.

What this looks like in practice

Persona

• Name: Sarah
• Age: 39
• Job: Human resources manager
• Gross income: AUD 130,000 per year (modelled figure, not from source)
• Investment property: 2‑bed unit in Brisbane, rented at AUD 550 per week (modelled)
• Current cover: standard home insurance on the unit, no landlord policy
• Years to retirement: 26 years (planning to retire at 65)

Discovery 1 – her “insurance” doesn’t cover tenant-caused damage

• Sarah discovers from REIQ and Westpac that regular home insurance typically does not cover damage deliberately caused by a tenant, because the tenant was allowed into the property with her permission.
• She compares this with landlord insurance that covers damage by tenants to contents, malicious or intentional tenant damage, and clean‑up costs for illegal drug production, all of which are landlord‑specific features.
• If her tenant’s malicious damage and contents replacement ever reached AUD 18,000 (e.g. replacing carpets, appliances and repainting – modelled), a home policy would likely pay AUD 0 while a landlord policy could cover much or all of this AUD 18,000 under tenant-damage provisions.

Discovery 2 – she has no protection for rent default

• Sarah learns that rent default is a feature only available under landlord insurance and not regular home insurance, and even then it may not be standard; she must pay an additional premium for it.
• Allianz shows her that, with appropriate landlord cover, she could be protected for up to 15 weeks of rent default, and up to AUD 10,000 of lost rent per period of insurance from listed events.
• On her AUD 550 per week rent, 15 weeks of default equates to AUD 8,250 (550 × 15) that a properly structured landlord policy could pay, whereas her current home-only set‑up would leave her personally AUD 8,250 out of pocket in that scenario.

Discovery 3 – a single clause could void her cover at claim time

• Reading Canstar’s guidance, Sarah discovers her policy can be voided by leaving the property unoccupied for “too long,” failing to pay premiums on time, or not contacting police after a break‑in.
• She realises she left the property empty for extended weeks during a renovation and had a late premium payment, which could give the insurer grounds to deny a future claim for a major event.
• If a serious storm event caused AUD 40,000 of structural damage (modelled) while her policy is considered void due to these breaches, she would receive AUD 0 from insurance, versus AUD 40,000 of repairs covered if the landlord policy were active and she had complied with conditions.

Each discovery ties to a specific monetary exposure: AUD 18,000 in damage, AUD 8,250 in rent default, and AUD 40,000 in uninsured structural damage – all stemming from misunderstanding what her insurance actually covers.

The full cost of doing nothing

For Sarah, the combined lifetime cost of Problems 1 and 2 is the cumulative effect of:

• One major malicious damage incident at AUD 18,000 not covered by home insurance.
• One extended rent default period of 20 weeks, totalling AUD 11,000 at AUD 550 per week, not covered because she never added rent default cover.
• One storm damage event costing AUD 40,000 where cover is denied due to an unoccupancy/voiding clause breach.

Headline number (modelled basis)

• Total combined cost over her investing life: AUD 69,000 (18,000 + 11,000 + 40,000) in direct out‑of‑pocket losses that appropriate landlord insurance and compliance with conditions could have substantially reduced or eliminated.

Modelling assumptions (explicit)

• Rent level of AUD 550 per week is a realistic but modelled figure (not from a regulator).
• Damage events (AUD 18,000, AUD 40,000) and rent default length (20 weeks) reflect plausible mid‑range claims sizes but are not sourced from official loss distribution data.
• The loss figures assume claims are denied under current home-only or misconfigured cover, versus partially or fully paid under well‑structured landlord insurance compliant with conditions.

Even under conservative assumptions, the tens‑of‑thousands‑of‑dollars exposure demonstrates what property investors are missing when they treat landlord risk as “just another home policy.”

What to do about it

Move 1 – Audit your current cover for tenant-specific protections

1. Action: Check whether you hold landlord insurance or just home insurance, and identify if rent default and tenant damage are explicitly covered.
2. Tool/portal: Use your insurer’s online policy portal (e.g. Allianz, QBE, Westpac) to open the Product Disclosure Statement (PDS) and policy schedule; landlords can see detailed coverage for loss of rent, rent default, malicious damage and liability.
3. Steps:

• Log in to your insurer’s portal and download the current PDS and policy schedule for your property.
• Search for terms like “rent default,” “loss of rent,” “tenant damage,” “malicious damage,” and “exclusions” to see if they are covered and whether they are optional extras.
• Note any gaps (e.g. no rent default cover, tenant damage excluded) and request a quote for upgrading to a full landlord policy.

4. What “good” looks like:

• Policy clearly labelled “landlord insurance”, not just home insurance.
• Explicit inclusion of rent default, loss of rent when the property is uninhabitable, and malicious/intentional damage by tenants, with caps clearly stated (e.g. up to 15 weeks, up to AUD 10,000 for lost rent, up to 12 months for uninhabitability).

Move 2 – Verify voiding conditions and maintenance obligations

1. Action: Identify the specific conditions that can void or limit your landlord cover and ensure your property management practices comply.
2. Tool/portal: Again, your insurer’s PDS and policy wording available online; Canstar and Westpac summaries of landlord insurance exclusions are helpful interpretive guides.
3. Steps:

• In your PDS, locate sections labelled “General exclusions,” “Policy conditions,” “Unoccupancy,” and “Cancellation/forfeiture”.
• Create a checklist for key requirements: paying premiums on time, maximum allowed vacancy period, mandatory reporting of break‑ins to police, and obligations regarding maintenance (e.g. managing mould, pests).
• Adjust your property management practices (or instruct your property manager) to meet these conditions – for instance, scheduling regular pest control and maintenance and ensuring any vacancy period complies with the policy’s rules.

4. What “good” looks like:

• No late premium payments or unexplained lapses in cover.
• Clear understanding of the maximum vacancy period and adherence to it.
• Documented police reports for any break‑ins, and regular maintenance to avoid losses being classified as wear and tear, neglect or pests, which are excluded.

Move 3 – Compare landlord policies using an independent tool

1. Action: Use an independent comparison service to benchmark your current landlord cover against market options and switch if necessary.
2. Tool/portal: Canstar’s landlord insurance comparison tool, which allows you to compare coverage and features across providers without entering personal details.
3. Steps:

• Go to Canstar’s landlord insurance comparison page and select your state and property type.
• Review each product’s inclusion of accidental/tenant damage, loss of income if tenants default, and exclusions like unauthorised repairs and construction faults.
• Cross‑check with your existing policy and consider switching to one that better matches your risk profile (e.g. includes rent default, tenant damage, and appropriate disaster cover for your region).

4. What “good” looks like:

• A policy that covers tenant-related damage and rent default, provides reasonable limits on loss of rent, and fits your property’s specific risks (e.g. flood or cyclone‑prone areas).
• Transparent exclusions that you understand and can manage (e.g. clear rules around DIY repairs, pests, and construction quality).

A myth worth clearing up

Myth

“My standard home insurance is enough – it will cover me for anything that happens at my investment property, including tenant issues.”

Fact

• Regular home insurance usually covers storm, fire, theft and owner liability, but it does not typically cover damage deliberately caused by a tenant, rent default or loss of rent due to tenant behaviour, because the tenant is someone the owner has allowed into the property.
• Landlord insurance is specifically designed to include loss of rent, rent default, and damage by tenants, and providers like QBE found that 43% of landlords are relying on home insurance only, which “may fall short of a landlord’s needs” for tenant-related risks.

Evidence from REIQ and QBE shows that home-only cover leaves landlords exposed to tenant losses that landlord policies are explicitly built to cover.

Corrections & disclosure: an AI-assisted, human-reviewed guide. Every figure is dated and sourced above. Spot something out of date or wrong? Tell us and we’ll correct it — corrections are noted here and in the video description.