When landlords compare policies, the features that matter most are often the ones they hope never to use: rent default, tenant damage and loss of rent. These covers can make the difference between a minor setback and a serious financial hit. Here is how they generally work and what to watch for.
Rent Default Cover
Rent default cover helps when a tenant stops paying rent or leaves without notice. Policies commonly pay a set number of weeks of lost rent, but there are usually conditions, for example:
- The tenancy must be under a written lease
- Proper tenant checks must have been completed
- Rent arrears must be acted on promptly, often within a set number of days
- The bond is typically applied to the debt first
If you self-manage your property, check whether the insurer places additional requirements on owners who do not use a licensed property manager.
Malicious Damage vs Accidental Damage
These two are often confused but are treated quite differently:
- Malicious damage is intentional, such as a tenant punching holes in walls or deliberately breaking fixtures.
- Accidental damage is unintentional, such as a tenant spilling red wine on carpet or cracking a stone benchtop.
Some policies include both, some include malicious damage only, and accidental damage may be an optional extra. Separate excesses and sub-limits can apply, so it pays to read the details.
Loss of Rent After an Insured Event
If a fire, storm or burst pipe makes your property unliveable, you lose rental income while repairs are completed. Loss of rent cover can help replace that income for a set period, often up to 12 months, depending on the policy.
What Is Usually Not Covered?
- General wear and tear from normal living
- Damage caused by poor maintenance or pre-existing defects
- Rent lost because the property sits vacant between tenants
- Pet damage, unless specifically included
- Damage from illegal activity, unless the policy specifically covers it
How to Strengthen Your Position as a Landlord
- Screen tenants thoroughly and keep records of every check.
- Complete detailed condition reports with photos at the start and end of each lease.
- Carry out routine inspections and keep inspection reports.
- Act quickly on rent arrears and keep written records of all communication.
- Fix maintenance issues promptly so a claim is not refused due to neglect.
Talk to a Broker Before You Need to Claim
Two landlord policies can look similar on price but respond very differently when you claim. Gidda Insurance Brokers helps property investors compare these features side by side and choose cover that suits the property and the tenancy. Read our landlord insurance guide for Victoria, explore our services or get in touch on 0491 999 555.
This article contains general information only and does not take into account your objectives, financial situation or needs. Before making a decision, consider whether the cover is appropriate for you and read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD). Gidda Insurance Brokers Pty Ltd is an Authorised Representative (No. 001307383) of Regis Licensing Pty Ltd ABN 71 130 820 727, AFSL 338156.
