Protect Your Investment Property with the Right Landlord Insurance

Owning an investment property can be an effective way to build long-term wealth, but it also comes with financial risks that many landlords underestimate.

A reliable tenant, a well-maintained property and professional property management can significantly reduce those risks. However, even the best-managed property can be affected by unexpected events such as accidental damage, severe weather, water leaks, loss of rental income or a tenant failing to meet their obligations.

That is where the right landlord insurance becomes essential.

Standard building insurance may not be enough

Many property owners assume their building or strata insurance will cover every problem associated with their rental property. Unfortunately, this is not always the case.

Building insurance generally protects the physical structure against insured events such as fire, storm or impact damage. Strata insurance normally protects the building and common property within a strata scheme.

Landlord insurance is designed to address some of the additional risks associated with renting a property. Depending on the policy, it may provide cover for:

• Loss of rent following an insured event

• Tenant-related damage

• Malicious damage or theft by a tenant

• Legal liability

• Landlord-owned fixtures, fittings and contents

• Certain tenant default situations

• Legal and tribunal-related expenses

The exact cover varies significantly between insurers. Policy limits, excesses, exclusions and claim requirements can also differ, which is why landlords should not simply select the cheapest premium.

NSW rental laws have changed

Recent changes to NSW residential tenancy laws have altered the way landlords and managing agents must deal with rent increases, pets, rent payments and the termination of tenancies.

Rent increases are now generally limited to once every 12 months. Since 19 May 2025, landlords must also rely on prescribed grounds when ending many tenancies rather than issuing a no-grounds termination. Tenants have also been given a clearer process for requesting permission to keep a pet. From 2 March 2026, landlords and agents must offer Centrepay as an additional rent-payment option when a tenant chooses to use it.

These reforms do not mean landlords are left without protection. They do, however, make correct procedures, accurate documentation and proactive property management increasingly important.

A poorly handled tenancy can lead to delays, lost rent, disputed bond claims, tribunal proceedings or an insurer rejecting a claim because required steps were not followed.

Your insurance and property management must work together

Taking out landlord insurance is only one part of protecting your investment.

Insurers may require landlords and property managers to demonstrate that reasonable steps were taken to manage the tenancy. Depending on the policy and circumstances, this could include:

• Completing a detailed ingoing condition report

• Keeping photographs and supporting records

• Conducting routine inspections

• Maintaining accurate rent ledgers

• Responding promptly to arrears

• Documenting tenant communication

• Addressing repairs and safety concerns

• Issuing notices correctly and within required timeframes

• Retaining invoices, reports and evidence of damage

NSW landlords, including self-managing landlords, are responsible for understanding and complying with residential tenancy laws.

Without proper records, even a legitimate insurance claim can become difficult to establish.

Questions landlords should ask about their policy

Before purchasing or renewing landlord insurance, consider asking your insurer or insurance broker:

Does the policy include loss-of-rent cover?Check what events activate the cover, how long payments may continue and what waiting periods or excesses apply.

How does the policy define tenant damage? Accidental damage, malicious damage, neglect and normal wear and tear may all be treated differently.

Does the policy cover tenant default? Some policies include rent-default protection as standard, while others offer it as an optional benefit or exclude it entirely.

What documentation is required when making a claim? Confirm whether the insurer requires condition reports, inspection records, breach notices, rent ledgers, police reports or tribunal orders.

Are pets covered? With more tenants now able to request permission to keep pets, landlords should understand how their policy deals with pet-related damage.

Is the property insured for the correct replacement value? The cost of rebuilding can be considerably higher than the property’s market value. Underinsurance may leave the landlord responsible for a substantial portion of a loss.

What are the exclusions? Look carefully at exclusions relating to vacancy, maintenance, mould, water damage, gradual deterioration and unlawful activity.

The cheapest policy can become the most expensive

An inexpensive policy may appear attractive until a claim occurs.

A higher excess, narrower definition of insured damage, limited loss-of-rent cover or strict claim conditions could leave you thousands of dollars out of pocket.

The objective should not be to purchase the cheapest policy. It should be to obtain appropriate cover for the property, the tenancy and your personal risk position.

Landlord insurance should always be reviewed by a suitably qualified insurer or insurance broker. Matt Borg Real Estate does not provide financial product or insurance advice, but we can help landlords identify the practical tenancy and property-management risks they should discuss with their insurance professional.

Protecting your investment requires more than collecting rent

Professional property management is about protecting the property, maintaining accurate records, managing risk and ensuring the tenancy is handled in accordance with current legislation.

At Matt Borg Real Estate, we help landlords stay informed, maintain strong tenancy documentation and respond appropriately when issues arise. With NSW tenancy legislation continuing to evolve, receiving the right property-management guidance could prevent costly mistakes and potentially save you thousands of dollars.

To discuss the management of your investment property or arrange a review of your current property-management arrangements, contact Matt Borg Real Estate today.

This article provides general information only and does not constitute legal, financial or insurance advice. Insurance policies vary. Property owners should obtain advice from a licensed insurance adviser or broker and review the applicable product disclosure statement.