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Does home insurance provide coverage against damage caused by tenants?

Vidhu Bajaj avatar
Vidhu Bajaj
- 4 min read
Does home insurance provide coverage against damage caused by tenants?

A home insurance policy is designed to cover damages to your home from sudden and unexpected events like fires, floods, and theft. However, if you’re a landlord renting out your property, concerns about potential damage caused by tenants or their guests might arise.

Tenant-caused damage could vary – it might be accidental, like a stain on the carpet, or it could be more intentional, like a broken window. Some home insurance policies might cover this kind of damage to an extent but it all comes down to the terms and conditions of your specific policy. 

In general, it’s unlikely for a standard home and contents insurance policy to provide comprehensive coverage against tenant-related damage. If you’re planning to rent out your home, you may want to consider a home insurance plan designed specifically for landlords. 

A standard home insurance policy may provide you some coverage against accidental damage caused by tenants, but make sure to read the Product Disclosure Statement (PDS) for the exact details. It’s possible that your insurer doesn’t cover you for the period when your property is rented out to tenants, which means you might not be protected against any kind of tenant-related damage, whether accidental or malicious.

If you're a landlord worried about possible tenant damage to your property, you might find landlord insurance more suitable than regular home insurance. Landlord insurance is a specific product designed to cover the risks associated with a rental property. 

In addition to providing coverage for the typical risks included in a standard home insurance policy, landlord insurance offers extended coverage for various situations that are specific to rental properties. Depending on the policy you buy, this may include coverage against theft and malicious damage caused by tenants and their guests, as well as loss of rent due to tenant default.

How is landlord insurance different from home insurance?

Landlord insurance is a type of home insurance that covers risks related to rental properties, including tenant-related damage. Unlike a standard home and contents insurance policy that covers you in case of insured events, like flood, storm, and fire (including bushfire), landlord insurance typically provides three types of cover - building, contents, and business. Business, in this case, refers to your tenants, and it covers issues or damages your tenants might cause.

Home and contents insurance

Landlord insurance

Designed to cover the costs of repairing or rebuilding your home if it's damaged in an insured event, like fire, flood, or burglary.

A type of home insurance specifically designed for homeowners who rent out their property. It can provide protection against some of the risks specific to rental properties, such as loss of rent and malicious damage caused by tenants or their guests.

Some policies might offer limited coverage for accidental damage caused by tenants.

Often covers both accidental and intentional tenant-caused damage like vandalism. However, the standard cover offered by various insurers may differ. 

Loss of rental income isn’t generally included in a home and contents insurance policy.

Loss of rent due to tenant default or following an insured event is often included or available as an add-on cover.

Covers personal items on the property, like furniture and belongings. Though you might need to purchase an additional cover for some valuables.

Personal items belonging to the tenants on the property aren’t typically covered by the policy.

What you should know before purchasing landlord insurance

Landlord insurance is designed to cover risks specific to rental properties, such as loss of rent and malicious damage caused by tenants or their guests. It may also cover theft, vandalism, and accidental damage to the property itself. However, landlord insurance policies aren’t all the same. 

Before purchasing a policy, it may be a good idea to compare quotes from different insurers to find the best possible coverage for your needs. The premium you pay for your policy might also vary depending on your insurer and the level of coverage. So take your time reviewing what’s included in the policy to select one that meets your requirements and is also affordable.

When comparing insurance policies, remember to look out for any specific exclusions that limit coverage. For instance, landlord insurance policies don’t always provide coverage for unoccupied properties. If your property sits vacant for a prolonged period, you might need to consider supplementary coverage. 

Additionally, be attentive to extra conditions, like mandatory regular inspections that could impact your coverage. Most insurance policies are unlikely to provide compensation for damages due to general wear and tear or lack of proper maintenance. Consider talking to your insurance provider to find out what’s included in your policy.

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Product database updated 21 May, 2024

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.