Why You Should Evaluate Your Landlord Insurance

4 July 2018
According to the Australian Bureau of Statistics, there are nearly 2.3 million rental houses in Australia, yet reports show underinsurance remains an issue for landlords.

Underinsurance in this instance refers to insurance that covers less than 90% of the total cost of the property, leaving room for potential loss should anything occur.

According to a 2017 report by the Insurance Council of Australia, eight in 10 home owners, landlords and renters were underinsured.

Landlord insurance can cover both a rental property and any contents owned by the landlord against a variety of events, such as fires, natural disasters, theft and malicious damage.

While some people may have foregone insurance in an attempt to save money, Canstar’s Group Manager of Research and Ratings Mitch Watson said others were unaware of what they were and weren’t covered for.

“Underinsurance is common in Australia across a range of different insurance products,” Mr Watson said.

“For landlords, where rent is a source of income, adequate protection can be important to prevent any possible impact on their earning potential.

“It is not only important that landlords consider insurance cover, it is important those taking it out make sure their cover is adequate to cover their potential loss.”

Mr Watson recommended seeking out specific policies that offered coverage for events that were likely to affect your property to avoid potentially being thousands of dollars out of pocket with inadequate cover.

“Event-specific coverage, such as for flood or storm damage, is necessary in some cases but not all,” he said.

“For example, a landlord whose property is located on elevated land will likely not require coverage for flood damage.”

2018 Outstanding Value Landlord Insurance – National Award Winners

Canstar’s Landlord Insurance Star Ratings uses a sophisticated and unique ratings methodology that compares both cost and features across landlord insurance products. After researching and rating 49 policies from 44 providers, Canstar is pleased to announce three winners of the National Award for Outstanding Value – Landlord Insurance and five winners of state awards.

The three winners of the National Award for Outstanding Value – Landlord Insurance in 2018 listed in alphabetical order are:

  • ANZ
  • Budget Direct
  • Suncorp Insurance

According to Mitch Watson, the award-winning products stood out from the market by offering competitive premiums that were bolstered by features such as higher limits for specific incident coverage.

The table below displays a snapshot of the recipients of the 2018 National Award for Outstanding Value – Landlord Insurance, sorted by provider name (alphabetically). The Star Ratings shown are based on cover for a house in NSW.

ANZ landlord insurance

ANZ Award winner

ANZ’s landlord insurance policy won 2018’s National Award for Outstanding Value due to a strong performance across both price and features. ANZ offered premiums below the market average for each of the 14 profiles considered in Canstar’s landlord insurance methodology, and also offered a market-leading feature suite including:

  • Comprehensive burglary cover
  • Storm and defined events cover
  • The landlord’s choice of builder/repairer and the option to rebuild on another site

ANZ also won a State Award for Outstanding Value for Victoria. Read more about ANZ’s landlord insurance here.

Budget Direct landlord insurance

Budget Direct Award Winner

Budget Direct won the National Award for Outstanding Value in 2018, predominantly due to its price-driven performance, according to Canstar Research. For example, its premiums for houses in Queensland were, on average, 52.86% cheaper than the market average. In addition to their competitive pricing, Budget Direct offered high flexibility through their extensive optional policy inclusions.

Budget Direct also won a State Award for Outstanding Value for Queensland, New South Wales and South Australia. Read more about Budget Direct landlord insurance here.

Suncorp landlord insurance

Suncorp Award WinnerSuncorp retained the National Award for Outstanding Value for a second year, which Canstar Research attributed to its competitive performance in each of the seven regions assessed in the methodology. Suncorp offered both competitive features and premiums – in South Australia, for example, premiums with Suncorp on units were on average 33.51% cheaper than the market average. Suncorp also offered cover for malicious damage rental loss caused by tenants.

Suncorp also won a State Award for Outstanding Value for Tasmania. Read more about Suncorp landlord insurance here.

2018 Outstanding Value Landlord Insurance – State Award Winners

In addition to the national awards, Canstar also determined one recipient of the State Award for Outstanding Value for each state and region considered in this year’s methodology.

The winners were:

  • North Queensland: Elders Insurance
  • Queensland: Budget Direct
  • New South Wales: Budget Direct
  • Victoria: ANZ
  • Tasmania: Suncorp Insurance
  • South Australia: Budget Direct
  • Western Australia: AAMI

For more information about Canstar’s Landlord Insurance Star Ratings, including eligibility criteria and how final ratings were calculated, view the methodology report.

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