Landlord insurance in Queensland: what it covers and what it leaves out

In this article

Written by

Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

About Kooky and Shaka →

An owner with one rental house or unit usually finds out what the insurance covers on the day something goes wrong. A tenant leaves owing rent and the carpet is ruined. Each of those losses may be insured, partly insured or not insured at all, and the answer often turns on a definition in a document few people read before they buy.

"Landlord insurance" is not one product with fixed contents. It is a label insurers put on policies that add rental risks, such as lost rent and damage by tenants, to ordinary building or contents cover. The wording differs from one policy to the next, and so do the limits, the excesses and the conditions. This guide sets out the layers of cover around a Queensland rental, the usual heads of a landlord policy, the exclusions that most often decide a claim, how the bond and a tribunal order sit beside it, what the law asks of the owner when buying, how disputes are handled, how the premium is treated for tax, and what the federal cyclone pool has and has not changed in the north.

Residential Tenancies Authority for the bond limit and the tribunal ceiling; Australian Reinsurance Pool Corporation for the cyclone event period.

Four kinds of cover around one rental

The first thing to separate is the building from everything else. Building insurance, sold to owner-occupiers as home insurance, pays to repair or rebuild the structure after an insured event such as fire or storm. Moneysmart, the consumer site of the corporate regulator ASIC, tells buyers to make sure the sum insured covers the full cost of rebuilding, and notes that the excess is the amount paid by the policyholder on each claim.

Contents insurance covers movable things. In a rental, the owner's contents are usually modest: carpets, curtains and blinds, light fittings, perhaps a dishwasher or a washing machine supplied with the home. The tenant's furniture, clothes and electronics belong to the tenant and are a separate matter, covered further down.

A landlord policy takes one or both of those and adds risks that only exist because the home is let. An owner of a unit is in a different position, because most of the building is already insured by someone else.

A unit: what the body corporate's policy covers

Under the Body Corporate and Community Management Act and its regulations, a Queensland body corporate must hold several kinds of insurance. Queensland Government guidance lists them: cover for common property and body corporate assets at full replacement value, public risk cover of at least $10 million for a single event and $10 million for the policy period, and, in most cases, cover for every building that contains a lot.

How far that building cover reaches depends on the type of plan. In a building format plan, which is how most unit blocks are registered, the body corporate must insure each building containing a lot for its full replacement value. In a standard format plan, the body corporate insures buildings that share a common wall, while a freestanding building on its own lot is the lot owner's to insure unless the scheme has set up a voluntary arrangement. Buildings the body corporate insures must be independently valued for replacement cost at least every five years.

The same guidance says what a "building" does not include for this purpose, and the list is the reason unit owners still need a policy of their own. It leaves out carpets, temporary wall, floor and ceiling coverings, curtains, blinds and other internal window coverings, air conditioners that serve one lot, fixtures a tenant can remove at the end of a lease, and appliances that are not wired or plumbed in. The body corporate's public risk cover relates to common property, not to what happens inside a lot. And nothing in a body corporate policy pays the owner's lost rent or a tenant's unpaid arrears.

Two further points come from the same source. An owner who improves a lot must tell the body corporate about the improvement and its cost as soon as possible, because it can change the premium; an owner who does not may have to pay for repairs the insurance will not cover. And where a claim on the body corporate's policy affects only one lot, that lot's owner should generally pay the excess unless the body corporate decides that would be unreasonable.

The usual heads of a landlord policy

Landlord policies are built from separate sections, each with its own definition, limit and often its own excess. Published determinations of the Australian Financial Complaints Authority, which reproduce policy wording when deciding disputes, give a fair picture of the structure, as do industry and consumer descriptions. The headings below are common. None is universal.

Loss of rent and rent default are often confused, and they answer different events. Loss of rent, in the usual wording, follows physical damage: the storm, the fire, the burst pipe that makes the home uninhabitable. Rent default follows the tenant's conduct while the home is perfectly sound. An owner can hold one without the other.

An AFCA determination reported by Insurance News in October 2023 shows how closely the sections are read. A sole tenant died during a fixed term and the owner claimed rent default for the weeks that followed. The policy's rent default section applied when a tenant left before the end of the tenancy without notice; a separate clause dealt with a sole tenant's death and paid up to two weeks' rent, subject to a $600 excess. AFCA found that the death clause, not the default section, was the one that applied.

Wear and tear, carelessness and pets

The exclusion that decides most damage claims is the oldest one in insurance: gradual deterioration is not an insured event. Worn carpet, faded paint, scuffed walls and loose hinges after a three-year tenancy are the ordinary cost of letting a home, and no landlord policy treats them as damage.

The harder line is between malicious, accidental and merely careless. AFCA lists, among the insurance complaints it handles, landlord claims denied because the tenant did not cause the damage maliciously, which says something about how often the question arises. Two determinations reported by Insurance News in 2021 mark the line. In the first, a tenant who had twice been refused permission painted a hardwood deck with house paint. The owners said the result was vandalism. AFCA found that painting a deck is not an intentionally harmful act, that the policy covered deliberately harmful acts and excluded reckless or negligent ones, and that a tenant ignoring an instruction was not something the policy insured.

In the second, an owner claimed for a long list of damage left by a former tenant. AFCA accepted the cracked door and holes in walls as malicious acts, the missing door knobs, light fittings and shower tap as theft, and the cracked windows under a glass section. It did not accept the holes in carpets, the damaged blinds, the scuffs and marks, or the cabinet doors off their hinges. The insurer had relied on exclusions for carelessness or neglect, general wear and tear, accidental damage and damage caused by a pet. The entry condition report also mattered: it showed defects already present when the tenancy began.

Conditions that decide a claim before it starts

A landlord policy is priced on a set of assumptions about how the home is let. When the facts differ, cover can shrink or fall away. These are the conditions worth finding in the product disclosure statement, the document that sets out the terms.

The tenancy agreement. Rent default sections are generally written around a tenant in occupation under a tenancy agreement. Industry descriptions note that a claim may be refused where there is no valid agreement, and some policies ask for a written agreement and inspection reports as evidence. Whether cover continues unchanged once a fixed term has ended and the tenancy runs on as a periodic one is a point on which policies differ, so it is a question for the insurer, in writing, before the term expires.

Short-stay letting. A standard home or landlord policy assumes a residential tenancy. The Insurance Council of Australia warned in April 2022 that most insurers treat short-term holiday letting as a commercial use, that claims arising during a paid stay may be declined under an ordinary policy, and that a platform's own host protection may leave gaps. Policies designed for short stays exist as a separate category.

Vacancy. Rent lost because no tenant can be found is a market risk and is not insured. Separately, building policies commonly restrict cover once a home has been empty for a stated period unless the insurer has been told; one industry guide puts the usual range at 30 to 60 days, varying by policy.

Pets and small items. Damage by animals is a frequent exclusion, and an excess applied to each event can leave small items below it.

Waiting periods. Some policies do not respond to rent claims that arise shortly after the policy begins. The same guide describes waiting periods of 7 to 30 days as typical, again varying by policy. Arrears that already exist when cover is bought are not a future risk and are not what the section is for.

Limits and excesses. Rent sections are capped, whether by weeks or by a dollar figure, and the cap for default is often shorter than the cap for damage. Excesses may differ between sections.

The bond, QCAT and the order of things

Queensland gives the owner a first layer of protection that has nothing to do with insurance. The rental bond, held by the Residential Tenancies Authority, can be claimed at the end of a tenancy for unpaid rent, damage or another breach of the agreement. Since 30 September 2024 a bond cannot exceed four weeks' rent, according to the RTA.

Four weeks' rent does not go far against a serious loss. Where the owner's claim is larger than the bond, the RTA's free conciliation service handles claims for compensation above the bond, and if no agreement is reached it issues a notice of unresolved dispute that allows an application to the Queensland Civil and Administrative Tribunal. QCAT can decide tenancy claims up to $25,000; the RTA says a larger claim must go to a court.

Insurance sits beside that process, not in place of it. Insurance pays for a loss the policyholder has actually suffered, so money already recovered for the same loss, whether from the bond or from the tenant, bears on what remains to be claimed. How a particular policy treats the bond, and whether it expects the owner to claim the bond or pursue the tenant first, is set by its wording. The practical sequence usually looks like this.

A tribunal order and an insurance decision answer different questions. QCAT decides what the tenant owes the owner under tenancy law. The insurer decides what the policy covers. An order for compensation is useful evidence of the loss, but it does not turn careless damage into malicious damage for the purposes of a policy that only insures the second.

One development concerns tenants directly. CHOICE reported in November 2021 that major landlord insurers had agreed to stop pursuing renters personally to recover the cost of accidental damage, after cases in which tenants received demands for tens of thousands of dollars following house fires. The commitments were voluntary, did not extend to intentional damage, and left insurers free to recover from a tenant's own insurer.

Telling the insurer the truth: the two duties

What an owner tells the insurer when buying or renewing can matter as much as the policy wording. The Insurance Contracts Act sets the rules, and there are two regimes.

For a consumer insurance contract, defined as insurance obtained wholly or predominantly for the personal, domestic or household purposes of the insured, the Act has since 5 October 2021 imposed a duty to take reasonable care not to make a misrepresentation to the insurer. The test looks at all the circumstances, including how clear and specific the insurer's questions were and whether the contract was new or a renewal. A fraudulent misrepresentation is always a breach. An insurer can also bring a policy within this regime by saying so in writing before the contract is made.

For other contracts, the older duty of disclosure still applies: the insured must tell the insurer what they know, or could reasonably be expected to know, to be relevant to its decision to accept the risk.

The remedies for a breach are the same in both regimes. If the insurer would have written the same policy on the same terms anyway, it has no remedy. Otherwise it may reduce what it pays to the amount that puts it where it would have been without the breach, and where the breach was fraudulent it may avoid the policy.

When a claim is disputed

Insurers that subscribe to the General Insurance Code of Practice accept time limits on claims handling. As summarised by the Financial Rights Legal Centre, an insurer must respond within 10 business days of receiving a claim by accepting it, refusing it, or saying what further information it needs. A decision is due within four months, or 12 months in exceptional circumstances such as a catastrophe or suspected fraud, and the policyholder is to be updated at least every 20 business days.

An owner who disagrees with a decision complains first to the insurer, which should generally give a written response within 30 days. After that the complaint can go to the Australian Financial Complaints Authority. AFCA says its service is free and that a determination binds the insurer if the complainant accepts it. Time limits apply to lodging a complaint, and there are monetary limits: Financial Rights listed $631,500 as the general insurance amount in dispute above which legal advice is needed, in a factsheet dated July 2025 that notes the figures change.

How the premium is treated for tax

The ATO's rental properties guide for 2026 lists insurance among the expenses an owner may claim in the year they are incurred, and names four kinds: building, contents, loss of rent and public liability. The deduction is available only for an expense the owner actually bore, and only to the extent the property was used to earn rent; a home used partly for private purposes needs the cost apportioned.

Two details catch unit owners and claimants. Where body corporate fees already include the building insurance, the ATO says the insurance cannot be claimed again separately. And money coming back is income: the guide says an insurance payment that compensates for lost rent is rental income, and that bond money the owner is entitled to keep must be included as rental income as well.

Cyclone and flood: what the federal pool changed

The federal cyclone reinsurance pool, run by the Australian Reinsurance Pool Corporation since July 2022, was set up to lower premiums in cyclone-prone areas. It is backed by a $10 billion annual Commonwealth guarantee. The ARPC states that the pool covers residential home and contents policies, including landlord insurance, and residential strata where at least half the floor space is mainly residential. It reinsures cyclone damage, including wind, rain, storm surge and riverine flooding caused by a cyclone, from the start of a declared cyclone until 48 hours after it ends.

The ACCC was directed to monitor whether savings reached policyholders. Its third report, released on 19 September 2024, put the median home and contents premium in north Queensland at $2,959 in 2023, against $1,781 in the rest of Australia, a gap of $1,178, or about 66%. Its fourth report, released on 22 July 2025, found that home and contents premiums per $100,000 insured in medium to high cyclone risk areas had fallen by an average of 11% compared with before the pool, and strata premiums by an average of 7%, while home and contents premiums rose 4% for low-risk properties and 7% where there was no cyclone risk. The average home and contents premium in north Queensland and the Northern Territory was still over $3,000 a year. Strata results varied sharply by city.

The ACCC's fifth and final report, published on 25 June 2026, concluded that the pool had moderated premium rises for households and small businesses facing medium to high cyclone risk, which make up around 2% of policies nationally, and that concerns about affordability continue.

For a rental owner, three things follow. The pool lowers an insurer's reinsurance cost; it does not set the premium, and it does nothing about the rent sections of a landlord policy. For a unit, the benefit arrives through the body corporate's premium and so through levies. And the pool reinsures only what the underlying policy covers. ARPC statistics published on 6 October 2026, as reported by Insurance Business, show that 64% of home building policies in the pool included storm surge cover and 86% included riverine flood cover.

The tenant's side of the line

Queensland tenancy law does not make the owner insure the tenant's belongings, and no landlord policy does so. Moneysmart puts the division simply: a renter does not need home insurance because the building is the landlord's responsibility, but may still want contents insurance. The RTA gives the same message to both sides, suggesting that tenants consider contents cover for their possessions and that owners consider a landlord policy that includes the building, with each checking what applies and what excess is payable.

Neither kind of cover is compulsory under tenancy law. A unit owner is covered for the structure through the body corporate whether they think about it or not. Everything beyond that is a choice about which risks to carry personally.

A landlord policy is a list of named events with a limit beside each one. The losses that fall between the names stay with the owner.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →