Insurance insights

General insurance vs purpose-built landlord cover

For many property investors, arranging insurance is a simple box to tick, often done at the same time as securing finance. In fact, when a property is financed, the lender will typically encourage the borrower to take out insurance straight away. In most cases, this is building insurance, designed to protect the asset itself and satisfy the lender’s requirements. While this approach is convenient, it raises an important question: is it enough for landlords?

Insurance products offered through major financial institutions are often designed with simplicity and accessibility in mind. They provide a straightforward way to get essential cover in place quickly, particularly during the busy process of purchasing a new property.

Typically, this type of policy will focus on building cover (to protect the structure against events like fire, storm, or flood) and basic levels of protection aligned with lender requirements.

For owner-occupied homes, this level of cover can often be suitable. However, investment properties introduce a different set of risks, ones that may not always be fully covered by general policies.

The unique risks of renting

Owning a rental property is not quite the same as owning your own home. Landlords face a unique range of risks, including:

• Tenant damage, whether accidental, intentional or malicious
• Loss of rent if the property becomes uninhabitable or the tenant refuses to pay
• Liability, if a tenant or visitor is injured on the property
• Legal expenses, such as disputes over tenancy agreements

Most of these risks are commonly associated with renting a property and can have a direct impact on a landlord’s income.

What specialist landlord insurance offers

Specialist landlord insurance is designed with rental-specific risks in mind. Rather than focusing solely on the building itself, these policies often take a more holistic view of the investment.

Depending on the insurer and level of cover, landlord insurance policies may include:

• Protection for loss of rent following an insured event (fire, storm and flood)
• Cover for tenant damage and rent default
• Optional contents cover for items provided as part of the rental (such as appliances or furnishings)
• Legal liability
• Pet damage caused by the tenant’s pet 
• Death of a tenant (loss of rent if a tenant dies and the property is uninhabitable)
• Drug lab clean-up
• Legal expenses and tax audits in relation to the property

The main difference is that specialist landlord insurance is also built for how the property is actually used (earning income) not just the body of the building.

Convenience vs suitability

Many people arrange insurance through a bank or major institution for a quick and straightforward solution when purchasing a property. However, convenience does not always equate to suitability.

For those with rental properties, the presence of tenants introduces risks that standard cover may not fully address.

We encourage landlords to review their cover to ensure it aligns with their investment goals and the risks they face. Specialist policies can broaden protection to reflect the risks you are more likely to face.

Getting it right

The right insurance depends on the individual landlord, the property, and how it is managed. Some may find that a standard building policy provides a sufficient starting point. Others may benefit from exploring options that are designed for rentals.

The key is understanding what is and is not covered.

Taking the time to review your policy, ask questions, and compare features can help ensure that your insurance is working the way you want it.

Got a question about your cover or how your existing policy compares to specialist options like EBM RentCover? Feel free to reach out to the EBM RentCover team on 1800 661 662.

While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are here, contact 1800 661 662 if you have any questions.