Although not mandatory, landlord insurance is most certainly recommended.
As with all investments, there is some risk involved in owning an investment property and having tenants living in that property. Your investment property is most likely one of your largest assets which is generating income for you. You will want to make sure the property is protected in case something happens as a result of a careless or malicious tenant, or natural disaster.
There are a variety of insurers on the market who offer policies covering loss of rental income, protection for your contents such as floor covering and curtains, and protection for the building and all the fixtures and fittings. All policies differ so it is vital that you thoroughly read the Product Disclosure Statement to get a clear picture of what is covered.
There are certain insurance policies which do not cover you if your tenant is not on a fixed term lease. Other insurance policies insist that you show evidence of having carried out routine inspections before paying claims on damage.
On the upside, you have peace of mind for those unforeseen “rainy days” ahead. And landlord insurance is usually tax deductible, so keep track of your receipts and talk to your accountant.