The 12 days of Christmas: landlord insurance edition

With the festive season fast-approaching, we have pulled together a few good-to-knows for landlords and agents. Here are 12 things that happened in 2025, and what they mean for landlord insurance.

Twelve months of rent growth

Rents continued to rise in 2025, increasing 4.3 per cent in the year to September and reaching a median of $672 per week. Most states now cap rent increases to once every 12 months.

TIP: Landlords and agents should ensure policies are updated to reflect any rent changes, as loss-of-rent payouts are based on the weekly rent listed on the policy schedule. Note that most insurers cap the weekly rent they automatically cover. At EBM RentCover this is $1,500. Higher amounts need to be agreed and approved. 

Eleven property preferences

Despite the lack of available rentals, tenants (and buyers alike) continue to look for properties that tick certain boxes – and are often willing to pay more for those properties. Eleven of the things making the wish-lists this year were: air-conditioning; solar panels; smart energy features; pet friendly; designer interiors; granny flats; gardens; school zones; multigenerational living; wellness features; and public transport.

TIP: If landlords renovate, they should update their sums insured to reflect the property’s increased value. Remember, standard landlord insurance cover often does not apply during renovations, so it is important to speak with the insurer about appropriate cover before work begins.

Ten K to switch 

Short-term accommodation, including through platforms like Airbnb and Stayz, has remained popular throughout 2025. The profits to be made from offering rentals short-term, as opposed to through the traditional market, have seen several owners make the switch. Given the chronic lack of longer-term rentals, this year Victoria imposed a short-stay levy, while the WA Government offered owners with short-stay accommodation $10,000 to switch to the traditional letting market. 

TIP: Short-stay rentals carry different risks than long-term properties, so it is important to choose the right type of landlord insurance. Policy features, especially around loss of rent, differ and landlords switching between markets must update their insurance accordingly. 

Nine-month affordability improvement 

Rental affordability improved for three consecutive quarters. In the June quarter, the proportion of income required to meet median rent nationally edged down to 24.4 per cent. Improvements were recorded in NSW, Victoria, Queensland, Tasmania, and the ACT, though affordability worsened in SA, WA, and the NT. 

TIP: Many tenants are struggling with the cost-of-living crisis, increasing the risk of rent arrears. Loss of rent from tenant default is a common reason for claims, but not all policies cover it. EBM RentCover (except Householders Rental) provides up to six weeks’ cover for rent default and up to 52 weeks for denial of access, provided the legal eviction process has been followed. 

Eight tails a-wagging 

With NSW and Tasmania (edging towards) introducing more pet-friendly rental laws this year, it is now easier for tenants to rent with their furry companions. Tenants still need to seek landlord permission to keep at pet at the premises, but the landlord cannot refuse consent without a valid reason. 

TIP: Although tenants are responsible for repairing any damage their pet causes to the rental, EBM RentCover policyholders can rest easy if their tenants don’t make good on their obligations. We are one of the few landlord insurance providers that provides cover for pet damage (up to $70,000) – and there are no onerous conditions attached to cover. 

Seven-figure medians 

One in three homes is now valued at more than $1 million – 41.9 per cent of houses and 13.5 per cent of units across the country have joined the million-dollar club, with more set to join by year’s end. 

TIP: While the market value of a property is not the same as its replacement value, it is important that owners keep the property sums insured nominated in their insurance policy up to date as housing prices climb higher. Always ensure the sums insured reflect the current replacement costs (for both building and contents) to reduce the risk of underinsurance. 

Six states a-reforming 

This year, NSW, Victoria, Queensland,  SA and the ACT all made amendments to their respective residential tenancy legislation (or other applicable laws) and Tasmania proposed reforms. Some key changes included limiting rent increases, banning rent bidding, making it easier to rent with pets, introducing minimum standards, and ending no-grounds evictions. 

TIP: A condition of insurance cover is that the policyholder (and their property manager) act lawfully. So, it is important that landlords and agents keep abreast of changes in tenancy laws to ensure compliance. In particular, it is necessary to be mindful of the rules around lawful evictions as claims (such as loss of rent or tenant-caused damage) may be jeopardised if the correct procedures are not followed.  

Five-year vacancy low 

The vacancy rate tightened even further in 2025 – reaching a record low of 1.47 per cent in the September quarter (less than half the pre-COVID decade average of 3.3 per cent). Across the nation, there were fewer than 40,000 properties listed for rent in any given month (dropping to around 36,000 in September), with rental availability 4.5 per cent lower than a year prior. 

TIP: While there is no shortage of demand for rentals, some landlords may choose to leave their property vacant. It is important to review the insurance policy if the premises will be unoccupied for an extended period. Most insurance policies cease to provide cover if the property is vacant long-term (the length of time varies between insurers but at EBM RentCover it is 90 days). Owners or agents should check with the insurer about cover options if the rental will not be occupied. 

Four times the investors 

Investor activity has surged this year, with demand for investor loans growing four times faster than owner-occupier loans. Queensland led annual growth, NSW investor lending outpaced owner-occupiers sixfold, and SA saw the highest growth in investor construction and new-dwelling loans. 

TIP: With more property investors entering the market, having the right insurance is essential. Standard home policies often do not cover risks like rent default or accidental damage. EBM RentCover provides landlord insurance tailored to the property and letting scenario, ensuring proper protection for common rental risks. 

Three rate cuts 

In February, the RBA cut the official rate for the first time since 2020. The 0.25 per cent cut was followed by a further 0.25 per cent rate reduction in May and again in August. Following the three rate cuts, the maximum amount the average Australian can borrow for a mortgage has risen by an estimated $36,000, and by $71,000 for a couple, both earning the average wage. 

TIP: The rate cuts have given buyers greater borrowing power and confidence, driving activity in the market – including investment properties. Whether a landlord is expanding their portfolio or the buyer is a newbie, having the right insurance on the rental is a necessity. It is important to not only select a policy suitable for the type of rental but also for how it will be leased (fixed-term or short-term including via platforms like Airbnb).  

Two insurance catastrophes 

At the time of writing, this year, the Insurance Council of Australia declared Tropical Cyclone Alfred and the Mid-North Coast/Hunter floods as catastrophes, alongside significant events like the North Queensland floods and Brisbane hailstorm. TC Alfred alone triggered over 131,000 claims worth an estimated $1.48 billion. 

TIP: Thousands of policyholders claim each year for damage from natural disasters. EBM RentCover provides cover for events such as bushfires, hailstorms, floods, and cyclones (with some location restrictions). Landlords and agents should review policies carefully to ensure adequate protection.

…and a landlord insurance policy 

Year after year, one thing remains constant for property investors: the need to protect their rental with the right insurance. Investment properties come with a unique set of risks from natural disasters to accidental damage, legal liability to loss of rent. The right insurance provides a financial safety net when the unexpected happens.  

One thing we do exceptionally well is protect landlords. In fact, more than 155,000 landlords nationwide trust EBM RentCover to safeguard their investment. If you have any questions about any EBM RentCover insurance product, our Expert Care team is ready to help. Call 1800 661 662.