The Great Insurance Squeeze: Are You Covered for a Rent Default in 2025?

Landlord insurance has long been a safety net for property owners, offering peace of mind when tenants fail to pay or vacate. But in 2025, that safety net is wearing thin. Insurers across Australia have quietly changed the game. Some have reduced or removed rent default protection, increased excesses, or imposed stricter claim conditions. Many landlords are now unknowingly exposed to significant financial loss.

Policies have changed — have you noticed?

Since the pandemic, insurers have been reviewing their risk exposure. Several have removed rent default cover from standard landlord policies, instead making it an optional add-on. Others have introduced conditions that make it harder to claim, such as requiring specific tribunal action or limiting the number of weeks covered. If you haven’t reviewed your policy recently, you may be operating without the cover you assumed was in place.

Common gaps that catch landlords out

Some insurers now only pay for loss of rent once the full eviction process has been completed. That means you may need to issue breach notices, apply to the tribunal, and obtain a termination or possession order before a claim becomes valid. This process can take weeks or even months. Some policies limit rent default claims to six weeks. Others exclude certain areas or tenants. And many won’t cover you at all if proper notices and documentation weren’t issued on time.

Why are insurers pulling back?

Landlord insurance providers have seen an increase in claims due to rising rent arrears, natural disasters, and tighter economic conditions. To manage their risk, many have responded by restricting coverage, tightening claims criteria, and raising premiums. In some cases, entire suburbs or property types are now excluded. The result is less protection for landlords and more financial pressure when tenants fall behind or refuse to leave.

What should landlords do now?

Start by reviewing your current landlord insurance policy. Read the Product Disclosure Statement carefully. Look for terms like rent default, loss of rent, denial of access, and malicious damage. Make sure you understand what conditions apply to each. Contact your insurer directly and ask whether tribunal orders or breach notices are required before you can make a claim. If you manage your own property, be aware that insurers expect strict compliance with state-based tenancy law. Late or missing documentation can void your claim. If you use a property manager, ask whether their processes align with your insurance policy’s requirements.

Why professional management matters

At Club Property Management, we stay on top of every legislative change and insurance update so you don’t have to. We follow best practice for issuing breach notices, maintaining rent ledgers, documenting tenant conduct, and navigating tribunal processes. That means if you ever need to make a claim, you’ll be in a stronger position to have it approved.

Are you confident your landlord insurance still protects you in 2025?

If not, now is the time to review your policy and your process. Don’t wait until your tenant stops paying to discover you’re not covered.

For expert support and advice, contact our team at leasing@clubpropertymanagement.com.au