Six irrefutable reasons why you need landlord insurance

Many landlords assume that having a property manager is enough to protect their investment. While a skilled manager is invaluable, they can’t shield you from every risk. That’s where landlord insurance comes in, providing financial protection against unforeseen events that could otherwise cost thousands.

Here are six irrefutable reasons why every property investor should have comprehensive landlord insurance.

1. Tenant circumstances can change

Even the most reliable tenants can experience unexpected life events. Job loss, relationship breakdowns or financial hardship can result in unpaid rent or tenancy disputes.

While a property manager can take legal steps to recover rent, delays and limitations often mean landlords still face financial loss. Landlord insurance covers rent default, giving you peace of mind.

2. Unforeseen delays in tribunal action

If a tenant falls behind on rent, legal action through the Tenancy Tribunal may be required. These processes can take weeks or months, especially if the Tribunal is backlogged.

Landlord insurance helps cover lost rent during this period, protecting your cash flow while legal matters are resolved.

3. Intentional tenant damage and theft

Accidents happen, but sometimes damage is deliberate. Malicious or intentional tenant damage, or theft of fixtures and fittings, can be costly.

Standard building insurance won’t cover these situations, but landlord insurance can provide compensation for:

• Vandalism
• Stolen items (curtains, carpets, appliances)
• Deliberate damage to property contents

4. Damage from drug production

While careful tenant screening reduces risk, legislation prevents landlords and agents from checking criminal histories. Unfortunately, some tenants may produce or consume illegal substances on the property.

The cost of cleaning and restoring a property used for drug production is substantial, often exceeding $100,000, and is not covered by regular building insurance. Landlord insurance ensures you’re financially protected against these events.

5. Death of a tenant

It’s an uncomfortable truth, but tenants can pass away while living in a rental property. Depending on circumstances, the property may require extensive cleaning, replacement of contents and rent loss during the process.

Landlord insurance covers these costs, helping you navigate an emotionally difficult situation without significant financial strain.

6. Pet damage

More tenants now have pets, which can increase the risk of property damage. Landlords can now legally collect a separate bond for pets on new tenancies, but insurance is an extra protection.

A quality landlord insurance policy protects against:

• Scratched floors and doors
• Chewed or stained carpets
• Damaged furniture or fittings

The bottom line

Landlord insurance complements professional property management by protecting against the risks no one can fully control. From rent default to accidental or deliberate damage, insurance ensures your investment remains secure, your income protected and your peace of mind intact.

How we can help

We can guide you in selecting quality landlord insurance tailored to your property type and tenant profile. Combined with professional management, it ensures your rental property is protected from all angles.