This fact sheet is one of a series that looks at the steps you can take to give yourself the best chance of fixing or replacing your property and belongings if they're damaged or destroyed in a natural disaster, such as a bushfire, flood or storm.
See Fact Sheet 18: Glossary for definitions of words and terms that are in bold text.
To find other fact sheets in the series go to www.InsuranceCheckup.tas.gov.au or visit your local Service Tasmania for an info pack.
When you might need landlord insurance
If you rent out an investment property, or if you rent part or all of the home you live in as an Airbnb or other shortstay rental, this is considered to be a business activity and so isn't usually covered under a typical home and contents insurance policy. You could suffer a big financial loss if your investment property is affected by a natural disaster.
Landlord insurance – what it covers
A landlord insurance policy usually covers your rental property against natural disasters. A standard policy will also generally include cover for permanent fittings and fixtures such as carpets, ovens, stovetops and window coverings.
However, you'll need separate contents insurance if you rent your property furnished, as landlord insurance doesn't usually cover items such as televisions, lounges or dining tables, for example.
If missed rental payments would cause you financial stress, look for a condition in your policy that will cover you for this if your property is badly damaged in a natural disaster. Some policies will cover you for up to 12 months' rent while your property is being repaired or rebuilt.
It's important to remember that not all standard landlord insurance policies cover damage caused by floods or natural disasters, including the removal of debris. There may also be restrictions on the payout you can receive.
If you're thinking about getting some landlord insurance (or any sort of insurance!), see and compare what a few different insurers are offering. The Insurance Council of Australia offers a free Find an Insurer service at www.findaninsurer.com.au. You can also contact the National Insurance Brokers Association at www.needabroker.com.au or phone 1300 531 073 to find an insurance broker in your area.
Make sure you carefully read the Key Facts Sheet and Product Disclosure Statement relating to the policy you are considering. Ask your insurer as many questions as you need in order to understand exactly what the policy covers and does not cover (see Fact Sheet 13: Finding and comparing insurers and insurance policies).
Short-term rental insurance – what it covers
Short-term rental insurance is a type of insurance that is specially designed to cover properties rented out for less than six months at a time, including holiday homes, Airbnb accommodation and serviced apartments. The insurance may be offered by an online accommodation-sharing service itself or be available from a separate insurer. Some policies include a premium that is only payable for the nights you have a guest staying.
If your property is professionally managed, you can get a short-stay landlord policy which covers situations that are unique to holiday properties. You may be able to obtain this through the company you are registered with or take out a separate policy with your own insurance company.
Although short-term rental insurance is worth considering, keep in mind that this type of insurance may not give you adequate cover for your particular circumstances, and so shouldn't be seen as a replacement for a standard home and contents or landlord insurance policy. For example, unlike landlord insurance policies, most short-term rental policies do not cover you for loss of rent if the property is uninhabitable for a period of time.
If you're renting out your own home – or part of your own home – for accommodation, don't assume that your basic home and contents insurance policy covers you. As part of your legal obligation to your insurer, you must let them know that you are doing this. You may be able to add appropriate cover and, while this will increase your premium, it may also be tax deductible. You may also wish to consider liability insurance in case one of your visitors is injured.
After a natural disaster
If you have insurance for your property, make a claim with your insurer as soon as you can – even if you don't know yet exactly what you've lost. Don't worry if you can't find your insurance papers – insurers have electronic records and need only your name and address.
For general information about the process of making an insurance claim after a natural disaster, see Fact Sheet 15: Claiming insurance after a natural disaster.
As a landlord, there are a few extra things that it might be useful to know:
About alternative accommodation for your tenant
- While you can offer your tenant assistance with finding and paying for alternative accommodation if your property is not fit to live in after a natural disaster, you do not have to do this (unless it is part of your lease agreement).
- If you contributed to the damage caused to your property by failing to properly maintain or repair it prior to the natural disaster, your tenant may be able to claim the costs of having to move out while the property is not liveable. This could include the cost of hotels and storage, as well as rent. Reimbursement for reasonable costs is something you can discuss with your tenant. Your tenant may seek legal advice and lodge a claim in the Magistrates Court. You can also seek legal advice from your own lawyer or you can obtain free advice from the Legal Aid Commission at www.legalaid.tas.gov.au or on 1300 366 611.
About cleaning up
- You are responsible for removing debris and cleaning the property and fixtures if they have been made dirty by flood or fire damage.
- Your tenant is responsible for cleaning their own belongings.
- If you organise cleaning or repair services, be wary of dodgy or unlicensed tradespeople offering cheap or cash-only repairs. Confirm with your insurer how you are covered for cleaning and repair services under your policy, and check with your local council to see if a building permit or other approval is needed for the work.
About repairs
- You are responsible for repairing any damage to the property. There are different rules depending on the type of repairs that are needed:
- general repairs (that are not your tenant's fault) must be completed within 28 days of your tenant telling you about the damage. An exception is if the repair relates to a cooking stove; in that case, it must be fixed within 14 days
- urgent repairs are when an essential service stops working, e.g. water, sewerage, electricity; these repairs must be completed as soon as possible after your tenant tells you about the problem
- emergency repairs are when your property is damaged and the damage will get worse if the repairs aren't done as soon as possible, e.g. if a window is broken in a storm and there will be more damage if it's not fixed quickly or there is an immediate health and safety risk.
- Your tenant is responsible for replacing or repairing their own belongings.
- Your tenant must let you know about damage to your property as soon as they can after a natural disaster. You can inspect your property, but you must still give your tenant appropriate notice. Contact the police or emergency services first to make sure you can enter the area where the disaster occurred.
- If your tenant can't contact you or you don't arrange for repairs and it is likely that the damage will get worse, your tenant can organise repairs, but only enough to prevent further damage. There are a couple of ways they can do this:
- Your tenant can arrange for damage to be repaired by a repairer you have previously nominated to undertake repairs to your property. In this situation, you must pay for the cost of the repairs
- Your tenant can arrange for a suitable repairer to repair the damage. A suitable repairer is someone who is licensed to carry out repairs to residential properties and does so as part of their business or employment. In this situation, your tenant must pay for the repairs but can get reimbursement from you.
- You must make the property liveable again within a reasonable time. How long is reasonable will depend on how bad the damage is, how hard it will be to fix, and whether qualified tradespeople are available to do the job.
- If you are not organising repairs within a reasonable time, your tenant may make an application for a Repair Order or give you a Notice to Terminate (end your lease). For more information about this, look under Renting on the Housing page of the Consumer, Building and Occupational Services website at www.cbos.tas.gov.au.
About the lease
- If your property has been destroyed or is so damaged that it's not fit to be lived in, your lease agreement doesn't automatically end (terminate).
- Ways that the lease CAN be terminated after a natural disaster are:
- if you and your tenant agree to a mutual termination of the lease
- your local council agrees to a request from your tenant to make an order under the Public Health Act 1997 to terminate the tenancy
- you give your tenant a Notice to Vacate
- your tenant gives you a Notice to Terminate.
For more information about this, look under Renting on the Housing page of the Consumer, Building and Occupational Services website at www.cbos.tas.gov.au.
About rent
- As long as you have a current rental agreement or lease in place, your tenant is responsible for continuing to pay the rent in full, even if the property is not fit to live in or is less liveable because of the damage caused by a natural disaster.
- While you are not obligated to reduce the rent, you should consider whether it's reasonable to charge full rent if your property is not currently liveable to the same extent it was before the natural disaster.
- If you and your tenant do agree to a reduced rent, put the agreement in writing and keep a copy.
- If you are not able to reach an agreement with your tenant about a reduction in rent, they may seek legal advice to see whether there is any further action they can take. You can also seek legal advice from your own lawyer or you can obtain free advice from the Legal Aid Commission at www.legalaid.tas.gov.au or on 1300 366 611.
About the bond
- You can only claim the bond at the end of the tenancy for the cost of repairs or cleaning that is necessary because of your tenant's use of the property – not for damage that has been caused by a natural disaster.
- In Tasmania, bonds are managed online through MyBond. If you need help to understand how bonds work or if you can't agree with your tenant about the bond, go to MyBond on the Housing page of the Consumer, Building and Occupational Services website at www.cbos.tas.gov.au. You can also ring MyBond Rental Services on 1300 654 499.
Where to go for more information and advice
To find out more about your rights and obligations as a landlord, go to the Consumer, Building and Occupational Services website at www.cbos.tas.gov.au and look on the Housing page, under Renting.
For free legal advice, contact:
- Legal Aid Commission of Tasmania at www.legalaid.tas.gov.au or on 1300 366 611
- Hobart Community Legal Service on 03 6223 2500
- Launceston Community Legal Centre on 1800 066 019
- North West Community Legal Service on 08 6424 8720
Resources
For general information, and for calculators and other tools to help you manage your own insurance:
- Understand Insurance: www.understandinsurance.com.au
- Find an Insurer: www.findaninsurer.com.au
- Money Smart: www.moneysmart.gov.au
Important notice
This fact sheet gives you basic and general information only. It does not cover every situation or everything you may need to know about insurance. It does not take into account your personal circumstances. Make sure you carefully read Key Facts Sheets and Product Disclosure Statements. Ask your insurer as many questions as you need in order to understand how your insurance policy will work for you. Use other tools available to you and seek professional advice if needed.
Information in these fact sheets has been drawn from a number of publicly available Government and non-Government resources.
This project has been jointly funded by the Commonwealth and Tasmanian Governments under the Disaster Recovery Funding Arrangements.