Does landlord insurance cover loss of rent?
It can, but it's often optional. In the landlord wordings we read, loss of rent pays when an insured event makes the property unliveable, usually for up to 12 months, and only if the cover is on your schedule.
- Source
- Landlord insurance PDSs from three Australian insurers
- Updated
Landlord Insurance — Loss of Rent
Loss of rent is available under the landlord policies we read, but whether it is standard or an optional extra, and how much it pays, differs. Cover generally applies when an insured event makes the property unliveable, for up to 12 months, and the amount is based on the rent in the tenancy agreement.
Standard or Optional?
▹ Two of the wordings we read sell loss of rent as optional cover: you apply and pay extra, and it appears on your schedule.
▹ One wording includes loss of rent for casual or holiday lets as a standard feature, subject to conditions.
Source: landlord insurance PDSs, loss of rent and optional covers sections.
When Cover Applies
▹ The property becomes unliveable because of loss or damage from an insured event.
▹ Access to the property is prevented because of damage to nearby property.
▹ In one wording, the property was empty at the time but you can show you were actively looking for a tenant; the lost rent is then based on the most recent lease.
One listed-events wording adds further triggers: death of a tenant (up to 6 weeks), murder or suicide at the property (up to 12 months), and, for short-term lets, a guest who fails to leave (up to 8 weeks or $6,000). Source: landlord insurance PDSs, loss of rent sections.
How Long and How Much
▹ Most wordings pay for up to 12 months from when the property became unliveable, capped at the sum insured on your schedule.
▹ One wording caps casual-let loss of rent at $25,000.
▹ One wording also pays up to 2 weeks' rent (up to $1,000 including GST) in certain circumstances.
For long-term leases the amount is based on the weekly rent in the tenancy agreement. For short-term lets, wordings look at confirmed bookings that were cancelled, past occupancy and local market rates. Source: landlord insurance PDSs, loss of rent sections.
What Is Not Covered
▹ Rent lost more than 12 months after the incident.
▹ Fees or commissions charged by holiday rental platforms, such as cleaning, advertising or management fees.
▹ Rent after the property is liveable again.
▹ Any amount you can recover from the bond.
Source: landlord insurance PDSs, loss of rent exclusions.
Important Notes
An excess may apply to each claim. Wordings differ between insurers, and retail and broker-arranged landlord policies can have different limits and conditions. Check the PDS and schedule for your own policy, or ask your broker.
Factual information from the policy wordings cited above, at the date above. It is not personal advice, financial product advice or a recommendation, and cover depends on your policy, schedule and circumstances. PolicyAI can make mistakes: check the current Product Disclosure Statement (PDS) or ask your broker before relying on it. Spotted an error? Tell us. See our disclaimer.
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