Landlord insurance in Victoria

TAMIKA SEETO
Finance Journalist · 8 October 2021
Renting out a property in Victoria? Landlord insurance can help protect your investment property and contents.

Landlord insurance is a type of home insurance that is specifically designed for people renting out their investment properties, whether that be a house, unit or townhouse. It can provide you with a level of financial protection against events like floods, storms, fire and theft, as well as events like tenant damage and loss of rent.

Victoria landlord insurance policies – houses

The following table displays a snapshot of landlord insurance policies for houses in Victoria, with links to providers’ websites. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD. 

Victoria landlord insurance policies – units

The following table displays a snapshot of landlord insurance policies for units in Victoria, with links to providers’ websites. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD), before making a purchase decision. Contact the product issuer directly for a copy of the PDS and TMD. 

How does landlord insurance work?

Landlord insurance is designed to protect you financially against damage to your building and/or contents, as well as some risks related to renting out an investment property. You generally can be covered for loss or damage from the following kinds of events, as standard or optional inclusions:

  • Events like floods, storms and fires
  • Loss of rent after an insured event
  • Theft, including by tenants or their guests
  • Malicious damage or vandalism, including by tenants or their guests
  • Tenant default where a tenant fails to pay their rent (note that some landlord insurance providers have stopped offering this cover due to COVID-19)

Is landlord insurance worth having?

Landlord insurance can cover you for a range of different insured events, plus incidents specifically related to having tenants. Although landlord insurance is not compulsory in Victoria, it can give you an added level of financial protection and peace of mind.

Because it is an investment expense, your insurance premiums may also be tax deductible. Other rental expenses the Australian Taxation Office says you may be able to claim include advertising for tenants, pest control, property agent’s fees and commission, repairs and maintenance and income protection insurance.

How much does landlord insurance cost in Victoria?

The cost of landlord insurance can vary depending on factors like the type of property you are insuring, the amount you are insuring your property for and where your property is located. It will also vary depending on whether you are taking out a building or contents insurance policy or a combined policy.

In Victoria, the average annual cost of landlord insurance is $1,161 for houses and $325 for units. In Melbourne, annual premiums are $1,172 for houses and $326 for units. Since a number of landlord insurance providers stopped offering new policies at the start of the pandemic, these figures are based on policies rated in Canstar’s Landlord Insurance Star Ratings and Awards from an earlier year. Read more about the changes to landlord insurance since the COVID-19 pandemic began.

Premiums for houses are based on $450,000 building sum insured and $25,000 contents sum insured. For units, premiums are based on $25,000 contents sum insured. Premiums are also based on a target excess of $500.

What is the average rental price in Victoria?

Domain’s Rental Report for June 2021 found that the average weekly rental price in Melbourne was $430 for houses and $365 for units. That equates to an average annual rental income of $22,360 for houses and $18,980 for units.

Put into perspective, that means landlord insurance premiums cost about 5.2% of the annual rental income on average for houses. For units, the percentage is only 1.7%. Of course, be aware that these are just averages and premiums and rental incomes will vary.

How to choose a landlord insurance policy

When comparing landlord insurance policies, some factors you might like to consider include:

  • What are the premiums charged? You may like to compare options to secure a better rate.
  • Do any discounts apply? It’s also worth checking whether any discounts apply, as this could help lower the overall costs.
  • What are the policy inclusions? For example, are you covered for theft, malicious damage or loss of rent? Does the policy cover damage caused by pets?
  • What are the exclusions or restrictions? Make sure you read the product disclosure statement (PDS) and have a good understanding of what the exclusions or restrictions of the policy are, including any sub-limits that apply. You may also want to read the Target Market Determination (TMD) that applies.
  • What is the excess? The excess is the amount you will have to pay towards a claim.

You can compare landlord insurance policies on Canstar’s database.

Cover image source: Shuang Li/Shutterstock.com


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