If you own an investment property, one of the first questions you’ll ask is:

How much does landlord insurance cost?

The honest answer is, it depends.

Landlord insurance premiums can vary significantly based on several factors, and two properties that look similar on paper can have very different pricing.

Here’s what actually affects the cost.

What Is the Average Cost of Landlord Insurance?

In Australia, landlord insurance typically ranges anywhere from a few hundred dollars per year to over $2,000 annually, depending on the property and the level of cover selected.

But price alone doesn’t tell the full story.

A cheaper policy may have lower limits on tenant damage or rent default, while a more comprehensive policy may provide broader protection and higher claim limits.

The key is understanding what you’re paying for.

What Factors Affect the Cost of Landlord Insurance?

1. Property Location

Location is one of the biggest pricing factors.

Insurers assess risk based on:

• Flood zones
• Storm and cyclone exposure
• Bushfire risk
• Crime statistics
• Suburb claims history

Properties in high-risk areas generally attract higher premiums.

2. Property Type and Construction

The type of property also matters.

For example:

• Freestanding houses
• Apartments
• Townhouses
• Older homes vs newly built properties

Construction materials (brick vs weatherboard), roof type, and the age of the property can all influence premium pricing.

3. Sum Insured

The sum insured is the amount you nominate to rebuild or repair the property (and replace landlord contents if included).

Higher sums insured generally mean higher premiums, but underinsuring can leave you exposed if there’s a major claim.

It’s important that the building sum insured reflects current rebuild costs, not just the market value of the property.

4. Level of Cover Selected

Not all landlord insurance policies are the same.

Premiums vary depending on whether you choose:

• Basic cover
• Comprehensive cover
• Optional add-ons

Some policies offer broader tenant damage protection, higher rent default limits, or extended loss of rent periods. These enhancements can increase premium but may offer stronger protection.

5. Rental Income

If your policy includes loss of rent cover, the level of weekly rental income declared can affect the premium.

Higher rental income often means higher potential claim exposure — which can influence pricing.

6. Claims History

Your previous claims history can impact premiums.

If you’ve made multiple landlord or property insurance claims in recent years, insurers may:

• Increase your premium
• Apply higher excesses
• Restrict certain cover

Why Do Premiums Vary So Much Between Insurers?

This is one of the most important points.

Different insurers:

• Assess risk differently
• Offer different policy wordings
• Apply different limits and sub-limits
• Treat tenant damage differently
• Offer varying rent default conditions

Two policies may appear similar in price but provide very different levels of protection.

That’s why comparing on price alone can be risky.

Is the Cheapest Landlord Insurance the Best Option?

Not necessarily.

A lower premium may mean:

• Lower claim limits
• Stricter definitions
• Higher excesses
• Narrower tenant damage cover

The goal isn’t simply to reduce premium, it’s to ensure your investment property is properly protected.

How Can an Insurance Broker Help?

A broker can assist by:

• Comparing landlord insurance policies across multiple insurers
• Explaining the differences in tenant damage and rent default cover
• Ensuring your sum insured is appropriate
• Checking whether the property usage is correctly disclosed
• Supporting you through the claims process if something goes wrong

This can help reduce the risk of unpleasant surprises at claim time.

Final Thoughts

The cost of landlord insurance depends on:

• Property location and type
• Sum insured
• Level of cover selected
• Rental income
• Claims history

Premiums can vary significantly between insurers, even for similar properties.

Before choosing a policy based purely on price, it’s worth understanding what is and isn’t included.

Your investment property is a major asset. Making sure it’s properly protected is just as important as securing a tenant.