McGrath Mudgee & Surrounds Property Management Monthly Newsletter – June 2025

Landlord Insurance – What and Why? 

You would have recently received an email from our office regarding the importance of holding current landlord insurance for your investment property. With a professional property manager in place, you might be wondering—why do I need insurance at all? 

While our team is here to expertly manage your property, some situations go beyond what a property manager can resolve alone—like NCAT proceedings or unexpected loss or damage that requires a formal insurance claim. This is where having the right cover in place is critical. 

What Kind of Insurance Do You Need? 

Here’s a breakdown of the three key types of insurance we recommend for all investment properties: 

1. Building Insurance

This is essential and typically required by your mortgage provider. Building insurance protects the structure of your property from major events such as: 

• Fire 

• Flood 

• Storm damage 

• Theft or vandalism 

Every insurer’s Product Disclosure Statement (PDS) differs, so be sure to understand exactly what’s included. 

2. Basic Contents Insurance

Even if your property is unfurnished, a contents policy is still important. You’re not covering your tenant’s belongings—you’re protecting fixtures that you own and that are not included in the building cover. This includes: 

• Carpets and floor coverings 

• Window furnishings 

• Light fittings and appliances 

Case in Point: One of our landlords experienced a flash flood after a sudden January storm. While the building insurance covered structural repairs, their policy excluded carpets, considering them contents. As a result, they had to replace all carpeting at their own expense. Interestingly, their vinyl flooring was covered—highlighting the importance of knowing exactly what’s included in your policy. 

3. Landlord Protection Insurance

This is the most tailored cover for investors and includes protection for: 

• Rent default 

• Accidental or malicious damage by tenants 

• Pet damage 

With recent legislative changes in NSW allowing more tenants to keep pets, it’s a good time to review your policy’s stance on pet-related damage. 

These types of claims often arise when a tenancy unexpectedly turns difficult—sometimes faster than anyone expects. A solid protection policy ensures you’re not left out of pocket. 

 Things to Consider When Choosing a Policy: 

• Excess: Policies with high excess amounts can quickly become unviable, especially in regional areas where rents are lower. 

• Exclusions: Always check your PDS carefully. Does it cover rent loss but not rent default? Does it exclude malicious damage? The fine print matters. 

EOFY Tip: Don’t forget—landlord insurance premiums are generally tax deductible.