Landlord insurance is one layer of protecting a rental investment. It can help with specified tenant-related losses and other insured events, but the policy works best alongside careful tenant selection, accurate tenancy records, routine inspections, timely maintenance and prompt action when something goes wrong. The exact cover, limits, excesses and exclusions depend on the insurer and policy, so landlords should read the current Product Disclosure Statement before deciding what is appropriate for their property.
Why landlord insurance matters
A rental bond can help with legitimate tenant liabilities at the end of a tenancy, but it is not a substitute for insurance. A larger loss can exceed the bond, and some insured events have nothing to do with the bond at all. Landlord insurance may provide cover for specified loss of rent, tenant damage, landlord contents and legal liability, depending on the policy.
What landlord insurance may cover
- Loss of rental income in specified circumstances such as tenant default or absconding
- Tenant-related damage to insured building items or landlord contents
- Specified events affecting landlord contents, depending on the policy
- Legal liability as a landlord
- Certain legal, tribunal, re-letting or possession-related costs where the policy provides those benefits
Landlord insurance, building insurance and strata insurance are not the same thing
A standalone house may require building insurance as well as landlord-specific protection. In a strata scheme, the owners corporation generally arranges compulsory strata building insurance, but that does not mean every item inside a landlord's lot is covered. NSW Government guidance notes that the contents of an owner's property are not the responsibility of the owners corporation. Landlords should check what the strata policy covers and what remains their own responsibility.
Why the rental bond is not enough
NSW rental bonds are held through NSW Fair Trading and can be claimed for legitimate tenant liabilities such as unpaid rent or damage beyond fair wear and tear. When a landlord or agent makes a disputed bond claim, evidence such as the exit condition report and quotes, invoices or receipts may be required. The bond is therefore one risk-control tool, not a replacement for suitable insurance.
Good property management can make a real difference when you claim
Insurance claims often depend on evidence. Terri Scheer's published claim requirements, for example, can include the lease, rental ledger, breach or termination notices, bond deductions, entry and exit condition reports, routine inspection reports, photographs and itemised quotes or invoices. Some water and storm-related claims also request recent routine inspection reports and a tradesperson's causation report.
How YAY helps protect your investment
Insurance is important, but protection starts long before a claim. Our property-management process is designed to reduce avoidable risk and preserve the records a landlord may need later.
Careful tenant selection
A structured application and tenancy setup process helps start the tenancy on a stronger footing.
Detailed condition records
Clear entry and exit records, supported by photographs, help establish the property's condition and support fair decisions if damage is disputed.
Routine inspections
Regular inspections help identify maintenance, tenancy and property-condition issues before they become larger problems.
Accurate rental records
Up-to-date ledgers and prompt arrears management create a clear record of the tenancy and any action taken.
Proactive maintenance
Timely repair coordination helps protect the property, reduce preventable deterioration and document how issues were addressed.
Claim-ready documentation
When an insured event occurs, organised tenancy records, reports, photographs, notices and invoices can make the claim process easier to evidence.
The landlord insurer we commonly use and recommend
At YAY Real Estate, Terri Scheer is a landlord insurer we commonly recommend. We use Terri Scheer for our own investment property, and a number of our landlord clients also use its landlord insurance. Based on our practical experience, we have found its landlord-focused cover, claims process and premium pricing to provide a strong balance for residential property investors. That is our experience, not a guarantee that one insurer or policy will be the right choice for every landlord.
Terri Scheer's current Landlord Preferred Policy for properties managed by a property manager includes specified loss-of-rent benefits, tenant-damage cover for building and contents, and up to $20 million legal liability, subject to policy terms, limits, sub-limits, excesses and exclusions. Its current policy documents should always be checked before purchase or renewal.
When something goes wrong, act early
- Notify your property manager promptly and take reasonable steps to prevent further loss or damage.
- Keep photographs, inspection reports, tenancy notices, ledgers, invoices and quotes together.
- Follow the tenancy process correctly if arrears, breach or possession issues are involved.
- Check the policy requirements and notify the insurer promptly.
- Keep evidence of re-letting activity if a loss-of-rent claim requires it.
- Do not assume a cost is covered until the insurer has confirmed the claim under the applicable policy.
Landlord insurance — common questions
Is landlord insurance compulsory in NSW?
Landlord insurance itself is generally not compulsory under NSW residential tenancy law, although lenders may have their own insurance requirements and strata schemes have separate compulsory building-insurance obligations. Landlords should assess the risks and their own circumstances.
If I have a rental bond, do I still need landlord insurance?
A bond and insurance serve different purposes. The bond may meet legitimate tenant liabilities up to the amount held, while insurance may respond to specified larger losses or insured events subject to the policy.
Do I need landlord insurance for a strata apartment?
Strata building insurance does not necessarily protect all landlord-owned contents, rental income or tenant-related risks. Check the owners corporation policy and your own landlord policy to understand where each begins and ends.
Does landlord insurance cover unpaid rent?
Some policies cover loss of rent in specified circumstances and subject to limits and conditions. It is not an unlimited guarantee of rent, so the PDS and policy schedule matter.
Does landlord insurance cover tenant damage?
Many landlord policies provide some tenant-damage cover, but definitions, exclusions, limits and excesses vary. Evidence of the property's condition before and after the tenancy can be important.
Why does YAY Real Estate often recommend Terri Scheer?
It is a specialist landlord insurer that we use ourselves and that a number of our landlord clients use. Our experience with its landlord-focused cover, claims process and pricing has been positive, but landlords should still review the current PDS and decide whether the policy suits their circumstances.
Can a property manager help with an insurance claim?
A property manager can help organise tenancy records and practical evidence such as leases, ledgers, notices, inspection reports, photographs and invoices. The insurer decides whether a claim is covered under the policy.
Terri Scheer — Landlord Insurance
Terri Scheer — Policy Documents
NSW Government — Rental property condition reports