Rental property insurance: what the landlord's policy covers, what the tenant's covers, and the gap between

Two policies, two jobs

• Covers the building — landlord insurance: yes; tenant contents insurance: no
• Covers the tenant’s belongings — landlord insurance: no; tenant contents insurance: yes
• Covers loss of rent — landlord insurance: often; tenant contents insurance: no
• Covers malicious damage by tenants — landlord insurance: often, as an add-on; tenant contents insurance: no
• Covers accidental damage the tenant causes to the property — landlord insurance: no, that’s the tenant’s liability; tenant contents insurance: often yes, via tenant liability cover
• Legally required — landlord insurance: no, but the landlord must tell the tenant whether the property is insured and the excess; tenant contents insurance: no

What a landlord must tell a tenant

A landlord must provide an insurance statement — whether the property is insured, and if so, the excess that would apply to damage caused by a tenant. That excess figure matters directly, because a tenant’s liability for careless or accidental damage is capped at the lesser of the excess or four weeks’ rent. If you don’t know the excess, you can’t know your exposure. Tenancy Services publishes an insurance statement template.

For tenants: the two things contents insurance does

It replaces your belongings. Fire, theft, storm, burst pipes — the building is the landlord’s problem, everything inside it is yours. Furniture, electronics, clothing, bike, tools. List the higher-value items and make sure your sum insured reflects replacement cost, not what you paid.

It covers tenant liability, and this is the part most renters don’t know they have. If you accidentally damage the property, a kitchen fire, an overflowing bath through a ceiling, you can be liable up to the excess or four weeks’ rent. Many contents policies include cover for accidental damage to the landlord’s property, which absorbs exactly that exposure. Check your policy specifically for tenant liability cover — it is frequently the most valuable component and the least discussed.

Premiums are typically modest relative to the exposure. Compare a couple of policies, check the excess, and check whether items are covered away from home.

For owners: where a standard house policy fails

A standard homeowner policy is written for an owner-occupier. Renting the property out changes the risk profile and can void cover or leave gaps that only surface after a loss. A landlord policy typically adds:

• Loss of rent where the property becomes uninhabitable
• Malicious or intentional damage by tenants, which standard policies commonly exclude
• Liability cover for injury or damage arising from the property
• Sometimes meth contamination cover, usually with specific sub-limits and testing conditions

What to check in a landlord policy

Sum insured must reflect rebuild cost, not market value. Underinsurance is the most common and most expensive error owners make. Rebuild cost includes demolition, professional fees and compliance with current building code, and has risen substantially. Review it annually.

Excess. Both the standard excess and any separate excess for tenant-related damage.

Conditions precedent. Many policies require regular documented inspections, or notification of vacancy beyond a set period. Failing a condition can void a claim entirely — this is a real and common cause of declined claims.

Meth cover. Check the wording against the current thresholds — 15µg/100cm² for decontamination, 30µg/100cm² for uninhabitable — and whether cover depends on baseline testing.

Pets. Since 1 December 2025, tenants are fully liable for pet damage beyond fair wear and tear, and a pet bond of up to two weeks’ rent is available. Check how your policy treats pet damage, and whether consenting to pets affects cover.

The gap between the two

Neither policy covers everything, and the space between them is worth understanding.

• Tenant’s belongings destroyed by a building fault — the tenant’s contents policy responds, and the tenant may separately claim against the landlord if the fault resulted from a failure to maintain
• Damage the tenant caused carelessly — the landlord’s policy responds, subject to the excess; the tenant is liable for the lesser of the excess or four weeks’ rent, and their contents policy may cover that liability
• Damage the tenant caused intentionally — the tenant is liable in full, uncapped, and no contents policy will cover deliberate acts

Frequently asked questions