When it comes to landlord insurance, many issues come from assumptions. Landlords often believe they are covered for more than they actually are. In reality, policies vary significantly, with exclusions and limitations. For agents, stepping in early can help landlords better understand their cover and avoid surprises down the track.
Most landlords approach insurance with reasonable expectations about what it should cover, based on what they understand to be standard inclusions. Some of the most common ones include:
Loss of rent is automatically covered
Many landlords assume that if their property is uninhabitable, or if a tenant stops paying rent or breaks the lease, their policy will automatically cover the loss. In reality, this depends on:
- What caused the loss
- How the policy defines loss of rent
- The period and limits of cover
- State legislation related to break lease fees
Some policies may not cover all scenarios or may only provide cover for a limited period.
Accidental damage and malicious damage are the same thing
These terms are often used interchangeably, but in insurance, they are treated very differently.
- Accidental damage refers to unintentional events
- Malicious damage involves deliberate acts intended to cause damage
- Intentional damage can also be defined separately, referring to damage caused knowingly, but not always with malicious intent
Everything is covered if I have insurance
This is one of the broadest and most risky assumptions. In reality, cover depends on:
- The specific inclusions and exclusions in the policy
- Cover limits
- Excesses
- Conditions around how the property is leased and managed
- What caused the loss e.g. a weather event
- Was it sudden and unforeseen or did it occur over time
For example, some landlords may not realise that certain types of damage (like pet damage) are not always included, or that failing to meet policy conditions could affect a claim.
Wear and tear is covered
There can be confusion between damage and gradual deterioration over time. While damage is typically sudden and event-based, wear and tear occurs naturally through everyday use.
Most policies do not cover fair wear and tear, as it is considered part of ongoing property maintenance rather than an insurable event. This can sometimes come as a surprise to landlords, particularly when issues like worn carpets, faded paint, or ageing fixtures are involved.
The sum insured will cover the full loss
It is common for landlords to assume that the sum insured represents the full amount they will receive if something goes wrong. However, the final payout can be influenced by several factors, including policy limits, sub-limits, and excesses. For example, certain types of damage or loss may have capped amounts, even if the overall sum insured is higher.
Why this matters for agents
While agents are not responsible for choosing a landlord’s insurance policy, they are often the ones who feel the impact when these assumptions do not hold up.
Misaligned expectations can lead to:
- Frustration during claims
- Delays in repairs or reletting
- Increased workload managing the situation
- Strain on landlord relationships
This is where a proactive, education-first approach can make a real difference.
Supporting better decisions through education
Agents do not need to give advice to create value in this space. Simply helping landlords understand that:
- Not all policies cover the same risks
- Definitions and limits matter
- The cheapest option may come with trade-offs
…can help shift the focus from price alone to suitability.
Early conversations and clear expectations can all help reduce the likelihood of issues later.
The takeaway
Insurance is only truly tested when something goes wrong and that is when assumptions can quickly unravel. By recognising the most common misconceptions and taking small steps to educate landlords and agents, agents can help prevent surprises at claim time and create a smoother experience for everyone involved.
At EBM RentCover, we support agents to support landlords. If you would like to learn more about how we can help your team and your landlords make more informed decisions about insurance, get in touch.