There can be a distinct sense of achievement that comes with buying an investment property – something that, at last count, around 2.3 million people in Australia have experienced first-hand.1
For some investors, it looks like buying a freestanding house with long-term tenants settling in. For others, it might mean getting on the property ladder with a furnished strata apartment delivering a steady rental income. Or maybe you’ve purchased an idyllic holiday home that you plan on renting out for short-term stays.
Whatever the set-up looks like, buying an investment property is usually a big decision – and working out how best to insure it can be another.
For example, will a standard home insurance policy provide enough cover? Or would landlord insurance suit better? Does the answer, and the level of cover you choose, depend on the type of investment property you own? And is taking out insurance for an investment property compulsory?
To help you wrap your head around the type of insurance you might need for your investment property, we’ve put together this guide to answer all of those questions – and more.
What insurance do I need for an investment property?
Your rental property insurance needs can depend on the type of investment property you own and how it’s used.2 We’ll go into more detail about types of investment property insurance you might like to consider for different properties, below.
But as a general rule, it can pay to remember that there’s a difference between landlord insurance and standard home insurance – and a standard, owner-occupier home insurance policy may not cover your investment property.2
Why is standard home insurance usually unsuitable for an investment property?
For starters, a standard home insurance policy doesn’t usually cover for certain risks of owning and renting out an investment property, such as tenant-related damage and rent default.2
Plus, if you own an investment property and you’re making money by renting it out, it’s classified as an income-producing property, which a standard home insurance policy doesn’t usually cover either.2,3
What does insurance for property investors cover?
An investment property insurance policy typically includes cover for many of the same events covered by a standard home insurance policy, with some additional features that are applicable to landlords.2
That’s because insurance for an investment property, such as landlord insurance, is simply a type of home insurance that’s been adapted for landlords.2
Investment property insurance could cover the property’s building, the contents inside it or both, depending on the cover you require or decide to take out.2 And, while it won’t usually provide cover for general wear and tear, depending on the policy, it may cover for events such as:2
- Theft
- Natural disasters, such as flood, bushfire or an earthquake
- Malicious damage
- Your legal liability costs if someone’s injured while visiting your investment property
- Loss of rent if insured events leave the investment property uninhabitable
- A tenant defaulting on their rent.2
Which type of insurance for rental properties do I need for my investment property?
The type – or types – of investment property insurance you might want or need to consider can depend on your property and how it’s used. Let’s look at a handful of common types of investment properties.
A freestanding house
If the property you’re renting out is unfurnished, then building insurance for landlords may be sufficient.2,3 This will typically cover the physical structure of your investment property, as well as certain fixtures and fittings.2 Depending on the insurer, it may even cover built-in furniture and appliances.2,3
A strata-title property
If your investment property is an apartment, a unit or a townhouse under a strata title, the body corporate may be responsible for insuring the building.4 The cost of this strata insurance is typically included in your building levies.5
Before you decide whether or not you need to take out your own building insurance policy as a landlord, you might like to check with the body corporate to see what’s covered.4
A furnished rental
Regardless of whether taking out building insurance for your investment property is one of your landlord responsibilities or is already taken care of by a body corporate, this doesn’t usually cover contents such as a television, lounges or dining tables.3
So, if you’re renting out an investment property that’s fully or partially furnished, you might like to consider taking out contents insurance for landlords3 – even if it’s a contents-only policy if the property’s structure is covered by strata insurance.4
A short-stay holiday home
If you’ve bought an investment property to list on a short-term holiday rental platform instead of renting to long-term tenants, you might like to think about covering both the property’s building and its contents with insurance for rental homes,6 given that the property is probably furnished.
Wondering where the rental platform’s insurance fits into the mix? While this may help pay for holiday rental damage caused by your guests, cover is limited.6
For example, Airbnb insurance only covers your investment property while you’re hosting a stay – not when it’s vacant.7 And it doesn’t cover for damage caused by other events, such as severe weather.8
A property you sometimes live in yourself
If you now spend some time living in a property you initially purchased as an investment, it’s important to update your insurance so that the policy’s occupancy type accurately reflects your situation – “landlord” when it’s tenanted and “owner-occupier” when you’re living there.9
Depending on whether you usually rent the property out furnished or unfurnished, you may also need to take out or adjust contents cover for any personal belongings you’re moving in – or out – with.9
To summarise, here’s a rundown of the different types of rental property insurance you might want to consider depending on the type of investment property you own.
| Type of investment property | Is it worth considering landlord building insurance? | Is it worth considering landlord contents insurance? |
| A freestanding house | Yes2,3 | It depends whether the property is furnished or not.3 |
| A strata-title property | Maybe not, depending on what the property’s strata insurance covers.4 | It depends whether the property is furnished or not.4 |
| A furnished rental | Yes2,3 – unless the property is part of a strata title.4 | Yes3 |
| A short-stay holiday home | Yes2,3 – unless the property is part of a strata title.4 | Yes, assuming the property is furnished.3 |
| A property you sometimes live in yourself | Yes, when your property is rented to tenants9 – unless the property is part of a strata title.4 | It depends whether the property is furnished or not when it’s rented to tenants.3,9 |
FAQs about investment property insurance
Now that you know the basics of how insurance for rental properties works, you might have some specific follow-up questions. Here are some answers to a few common ones.
Do I need landlord insurance as well as building insurance for my rental property?
No. Because landlord insurance for buildings is basically home insurance for buildings with a few added extras, if you’re renting out a property that you own, you don’t need both landlord insurance and a separate home insurance building policy at the same time.10
How much is investment property insurance?
The cost of insurance on an investment property can depend on a variety of factors, such as:
- The level of cover you need – Whether you’re covering your investment property’s building, its contents or both – and for how much – will play a role in how much your insurance costs.11
- The excess you choose – Selecting a higher excess, which is the amount payable if you need to make a claim, may help to lower premiums.10,11
- The type of investment property you’ve purchased – Its age, size, features and what it’s constructed from can affect the cost of insurance.10,11
- The property’s location – Proximity to areas prone to natural disasters or areas with high crime rates is also used to calculate insurance premiums.11
- How much you charge for rent – Rental property insurance may cover loss of rent in certain circumstances, so higher rents may impact premiums.11
- How resilient the property is – Building or retrofitting a property to mitigate the risk of damage from severe weather such as cyclones, storms and flooding, or even bushfire, may affect insurance premiums.12
Is landlord insurance tax deductible?
Typically, yes. When you have a property investment, home insurance premiums are considered a property expense by the Australian Taxation Office.13
Investment property owners can usually claim tax deductions for these expenses, based on the proportion of an income year that the property is rented out or genuinely available for rent.13
Is taking out insurance for an investment property mandatory?
No. Unlike owning a car where having Compulsory Third Party (CTP) insurance is legally required to register a vehicle,14 taking out insurance on an investment property isn’t mandatory.11
A caveat to this may be if you have a loan on your investment property. If you do, your lender may require you to take out some type of rental property insurance as a condition of the mortgage.11
Either way, having a suitable type of investment property insurance in place may cover the cost of repairing or rebuilding your rental property if something goes wrong.2
Does Youi offer investment property insurance or rental property insurance?
Yes. At Youi, you can choose to insure an investment property that you own and are renting out – including as a holiday rental – with either Building insurance, Contents insurance or both, depending on the level of cover you need.15
In addition to cover for events such as storm, fire and theft,15,16 when you specify the occupancy type as “landlord”, your policy will automatically include one or two extra features as standard:17
- Landlord’s loss of rent – Your rental income will be covered for up to 12 months if your property is not fit to be occupied after an insured event and where a claim has been accepted under either a Building or Contents insurance policy.
- Landlord’s furnishings – Youi’s Building insurance also provides up to $10,000 cover for furnishings and furniture, including whitegoods, that you’ve provided in the property for your tenants.17
Provided your investment property isn’t being used as a short-term rental, you can also add an optional cover called Lessee/Tenant Default and Damage for an additional cost.18 This provides cover for:18
- Rental arrears – Loss of rental income is covered if your tenant defaults on their payments or vacates the property without giving notice.
- Theft or damage – Theft or intentional damage to the property committed by your tenant is covered.18
Whether it’s an apartment in a strata building, a freestanding house, or a fully furnished unit you’re planning on Airbnb’ing, buying an investment property can be a significant milestone – and hopefully choosing the type of rental property insurance to suit your situation now feels a little less confusing.
And, if you’d like to learn more about the landlord cover offered by Youi’s Building and Contents policies, consider starting a quote with us online or by giving us a call on 13 9684.
1 Source: Reserve Bank of Australia – Insights From New Data on Australian Housing Investors, May 2026
2 Source: Canstar – Compare Landlord Insurance, August 2026
3 Source: TasALERT – Fact Sheet 10: Landlord insurance, n.d.
4 Source: Moneysmart – Choosing home insurance, July 2026
5 Source: Insurance Council of Australia – Improving outcomes for strata residents, November 2024
6 Source: Canstar – Short Term Rentals Airbnb & Holiday Rental Insurance, February 2026
7 Source: Airbnb – Getting protected through AirCover for Hosts, n.d.
8 Source: Airbnb – Host damage protection, n.d.
9 Source: Q Financial – Moving Into Your Investment Property: A Smart Way to Own Sooner, July 2025
10 Source: Canstar – Home Insurance Comparison, August 2026
11 Source: Canstar – What does landlord insurance cost in Australia?, March 2026
12 Source: Insurance Council of Australia – Reduce your risk, n.d.
13 Source: Australian Taxation Office – Rental expenses, May 2025
14 Source: Moneysmart – Choosing car insurance, August 2026
15 Limitations and exclusions may apply. See the PDS for full details.
16 Exclusions and limits may apply. Where you have increased your cover or reduced your excess within 72 hours of a flood, storm, hail or bushfire occurring, cover will be limited to the amount that was effective prior to the change. Loss, damage or legal liability caused by, resulting or arising from flood, storm, hail or bushfire during the first 72 hours of your policy first being purchased is excluded unless certain conditions apply. For full details, see the PDS, TMD and your policy schedule.
17 Limits, exclusions and terms and conditions apply. See the PDS for full details.
18 Limitations and exclusions apply and there are waiting periods or additional fees for certain types of cover. Full details are in the PDS and TMD, which we recommend you consider before making any decisions regarding our products.
