Landlord insurance is one of those things most property owners set up once and never look at again. And honestly, I understand why. Life gets busy, the policy is sitting in a drawer somewhere, and nothing has gone wrong yet. So why dig it out?

Well, I had a situation recently that reminded me exactly why a landlord insurance review matters, and it's one I think every property owner needs to hear.

The Story That Prompted This Post

I recently took on a property as part of an acquisition. The son of an elderly gentleman had been managing the property on his father's behalf, doing the best he could without formal property management support.

When we went through the property details, we tracked down the insurance policy. It was an RAA building policy with rent loss attached. Nothing unusual there. But when we looked at the numbers, the building was insured for $150,000. Contents were listed at $1,500.

The actual rebuild cost if that house burned down today? Approximately $700,000.

The policy had likely never been updated since it was first taken out, around 20 years ago. The owner would have been significantly underinsured in the event of a serious claim, and no one had flagged it until now.

This is exactly why I send annual reminders to every owner I manage, prompting them to review their cover before something happens, not after.

Why Does This Happen More Than People Think?

Because insurance has a set-and-forget quality to it. You take out a policy when you buy the property, you file it away, and unless something goes wrong, it rarely gets thought about again.

The problem is that building and construction costs have risen substantially over the past decade. What felt like adequate cover when a policy was first written may now leave a significant gap between what you're insured for and what it would actually cost to rebuild.

Most owners don't realise how large that gap has grown until they need to make a claim. At that point, it's too late to fix it.

What Does Landlord Insurance Typically Cover?

Policies vary between providers, so this is a general overview only. Your own policy may cover more, less, or different things, and I always recommend reading it carefully and speaking directly with your insurer about your specific circumstances.

That said, landlord insurance generally covers some combination of the following:

• Building cover, protecting the physical structure of the property
• Contents cover for fixtures, fittings, and any landlord-owned items inside the property
• Rent loss or loss of rental income if the property becomes untenantable due to an insured event
• Liability cover in the event someone is injured at the property
• Malicious damage caused by tenants

Exactly what's included, what's excluded, and for how long you're covered for things like rent loss will depend on the policy you hold. If you're not sure what your policy actually covers, now is a good time to find out.

What Should You Check When Reviewing Your Policy?

A proper landlord insurance review doesn't need to take long. A conversation with your insurer and a look at your current policy documents should be enough to identify whether anything needs updating.

Here are the key questions worth asking:

• Is the building insured for its current replacement value, not its market value? These can be very different figures.
• Has the property been renovated or improved since the policy was last updated?
• Are the contents figures still accurate, or have you added fixtures and fittings over the years?
• Does the policy include loss of rent, and if so, for how long?
• Are there any exclusions in the policy that are particularly relevant to your property or tenancy type?
• When did you last actually speak with your insurer about whether your coverage level is still appropriate?

For a deeper look at common misconceptions owners have about what their policy actually covers, RentCover's guide to landlord insurance myths is worth reading before your next policy review.

Why I Send Annual Reminders to My Owners

To be clear, insurance is arranged by property owners directly. That's not something I organise on your behalf, and it's not something a property manager can or should do for you.

But sending an annual reminder to check your cover? That's absolutely part of what I do.

A good property manager isn't just handling the day-to-day, the inspections, the maintenance calls, the tenant communication. They're also thinking about the bigger picture of your investment and flagging things that could become a serious problem if left unattended.

The situation I described above is a real one. That family came very close to holding a policy that would have left them hundreds of thousands of dollars short in the event of a major loss. That's not a small oversight. That's a financial consequence that could have been entirely avoided with one phone call to their insurer at some point in the past two decades.

Sending that annual reminder is a small thing I can do that potentially makes an enormous difference for the people I work with.

Is a Policy That's Never Been Reviewed Still Adequate?

Not necessarily. A policy that hasn't been reviewed is not the same as a policy that's still suitable for your situation.

Building costs change. Contents and fittings change. Rental income figures change. The property itself may have changed through renovations or improvements. Any of these factors can create a gap between what you're covered for and what you'd actually need if something went wrong.

A 20-minute conversation with your insurer once a year is genuinely worth doing. It's one of those small actions that costs nothing but could make a significant difference when it matters most.

This post is general in nature and is not financial or legal advice. Please speak with a licensed insurance professional about your specific circumstances and policy requirements.

Frequently Asked Questions About Landlord Insurance Reviews

How often should I review my landlord insurance policy?

At minimum, once a year. You should also review your policy whenever the property is renovated, when your rental income changes significantly, or when you take on a new tenancy. Building and replacement costs shift over time, so an annual check keeps your cover aligned with your actual circumstances.

What's the difference between building replacement value and market value?

Market value is what the property would sell for on the open market. Replacement value is what it would cost to rebuild the property from the ground up if it were destroyed. These figures can be very different, and your building insurance should reflect the replacement cost, not the sale price.

Does landlord insurance cover loss of rent?

Many landlord insurance policies include a loss of rental income component, but the conditions, duration of cover, and circumstances that trigger the benefit vary between providers. Check your specific policy and speak with your insurer to understand exactly what's covered and for how long.

Does my property manager arrange landlord insurance for me?

No. Landlord insurance is arranged directly by the property owner. A good property manager will remind you to review your cover and flag potential concerns, but the policy itself is your responsibility to hold and maintain.

What happens if my property is underinsured?

If a claim is made and the property is underinsured, the insurer may only pay out a proportion of the claim relative to the shortfall in cover. This is sometimes called the co-insurance clause or averaging clause. The result is that you bear a portion of the loss yourself. Speaking with your insurer about whether your current coverage is adequate helps avoid this outcome.

The owners who come out of difficult situations in the best shape are the ones who didn't wait for something to go wrong before checking whether they were actually covered. Take 20 minutes, pull out your policy, and give your insurer a call. It's a straightforward thing that's easy to put off and genuinely worth doing.

Contact us to discuss our property management services and find out how Elevate Realty looks after more than just the day-to-day for every property we manage.