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Build-to-rent insurance solutions for large-scale residential assets

Build-to-rent assets can combine building, rental income and tenant-related risks. Marsh helps owners, developers and operators consider insurance arrangements that reflect how the asset is owned, occupied and managed.

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What is build-to-rent insurance?

Build-to-rent (BTR) developments are residential properties where lots are retained by an owner, developer, managed investment trust or other entity and leased directly to tenants rather than sold individually.

Because the same asset combines residential property and ongoing rental operations, insurance may need to address the building and common property alongside rental income, landlord-owned property and tenant-related exposures. The exact arrangement depends on the asset structure and policy terms.

How is build-to-rent different from traditional strata?

Traditional strata commonly involve individual lot owners sharing responsibility for common property through a body corporate or owners corporation. In BTR, the residential lots are retained rather than sold individually, so the ownership and rental model is different.

Depending on the structure, body corporate, owners corporation or other building cover can address insured damage to the building, common property and certain fixtures. Landlord insurance can address rental-specific exposures such as tenant-caused damage, rental income and liability, depending on the cover arranged.

What can insurance for build-to-rent assets cover?

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Building and common property

Strata building insurance can respond to insured damage to the building, common property and certain common-area contents, subject to the policy terms, conditions, limits and exclusions.

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Permanent fixtures

Permanent fixtures within residential lots can form part of the insured building, depending on the policy wording and ownership arrangements.

Loss of rent after insured damage

Some strata policies can respond to lost rent when insured damage makes a tenanted lot unfit for occupation, subject to claim acceptance, limits and policy conditions.

Rental-specific landlord risks

Separate landlord insurance can help address rental-specific exposures such as tenant-caused damage, rental income and liability, depending on the cover arranged.

Rent default

Rent default is different from loss of rent caused by insured building damage. Separate landlord cover may respond, depending on the policy terms and conditions.

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Tenant belongings

A tenant’s personal belongings are generally not part of strata building insurance. Tenants may need their own contents insurance for these items.

Landlord-owned removable contents

Removable items owned by the landlord may fall outside the strata building policy and may need separate landlord or contents cover, depending on the policy.

Maintenance and defects

Wear and tear, corrosion, faulty workmanship, defects and maintenance-related issues can fall outside strata cover. It depends on the policy wording.

How does loss of rent cover work for build-to-rent assets?

Loss of rent caused by insured property damage is different from rent default. Some strata policies can pay lost rent when an accepted insured event makes a tenanted lot unfit for occupation, subject to limits, repair periods and other policy conditions.

Rent default relates to a tenant failing to pay rent under a rental agreement. Separate landlord rent-default cover may apply, with conditions such as a signed lease, no existing arrears and reasonable legal steps to address non-payment. Policy requirements vary.

Strata cover and landlord cover: what is the difference?

Because these covers serve different purposes, BTR owners and operators may need to consider how building and landlord policies work together. The exact allocation of cover depends on the policy wording and ownership structure.

 

​​Exposure

​Strata/building policy  

​Landlord policy

​Building and common property

​Can respond to insured damage to the building, common property and certain fixtures.

​Not generally its primary purpose.

​Loss of rent after insured damage

​Some strata policies can provide loss of rent when insured damage makes a tenanted lot unfit for occupation.

​Rental-loss cover may also be available, depending on the policy arranged.

​Tenant-caused damage 

​Some strata products include particular tenant malicious-damage benefits.

​Can address tenant-caused damage as a rental-specific exposure, depending on the policy.

​Rent default

​Different from insured-event loss of rent. Whether any cover applies depends on the policy wording.

​Rent-default cover may apply when a tenant fails to pay rent, subject to policy conditions.

​Tenant belongings

​Generally outside strata building cover.

​Generally the tenant’s responsibility rather than the landlord’s property cover.​ 

Why replacement value matters for build-to-rent assets

The market value of a build-to-rent asset is not the same as the cost to reinstate it after major insured damage. Replacement values need to reflect rebuilding costs such as labour, materials, demolition, debris removal and professional fees, rather than relying on sale value alone.

Inflation, property improvements and changing construction costs can make insured values outdated. Regular professional valuations and reviews of the building sum insured can help reduce the risk of a claim shortfall that owners may need to fund.

Common underinsurance risks for build-to-rent assets

Build-to-rent assets can become underinsured when declared values do not keep pace with changes to the property or rebuilding costs.

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Outdated valuations

Older valuations may no longer reflect current reinstatement costs, leaving a gap between the insured value and the amount needed to rebuild.

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Rising rebuild costs

Inflation and higher labour, material and other rebuilding costs can cause insured values to fall behind the actual cost of reinstatement.

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Sums insured set too low

Keeping sums insured below current rebuilding costs can increase the risk of a financial shortfall following a major insured loss.

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Unrecorded improvements

Permanent fixtures and improvements can increase replacement costs if they are not reflected when the building sum insured is reviewed.

Short-stay rentals and build-to-rent insurance

Short-term rental arrangements can be treated differently between strata policies. Some wordings recognise short-term rental income and records from electronic booking platforms, while others define short-term or holiday letting separately from a residential tenancy.

Build-to-rent operators should discuss relevant changes in occupancy, use or risk with their broker and check how the policy defines the tenancy arrangement. Policyholders may also have obligations to notify certain changes and take reasonable care not to make a misrepresentation.

Why choose Marsh for build-to-rent insurance solutions?

Marsh combines insurance broking, strata experience and risk consulting services to help owners, developers and operators consider the risks around residential assets.

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Property and strata experience

Marsh works with bodies corporate, strata managers and property developers, including build-to-rent developments, to help identify and arrange relevant insurance.

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Risk and valuation support

Marsh Risk Consulting services include asset valuations, property risk engineering, natural catastrophe modelling and emergency planning.

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Placement and claims support

Marsh brokers work with insurers on placement and renewal negotiations and can support clients through the claims process.

Why use an insurance broker for build-to-rent assets?

A build-to-rent asset can involve several types of exposure across the building and rental operation. A broker can help review how the policies fit together, explain the relevant terms and identify areas that may need separate insurance.

Marsh brokers work with insurers on placement and renewal negotiations, review uninsured risks and support clients through claims. This can help build-to-rent owners and operators make more informed insurance decisions as the asset changes over time.

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Related insurance solutions for build-to-rent stakeholders

Depending on your role and ownership structure, these strata and property insurance solutions may also be relevant.

Frequently asked questions

  1. Complete and submit a claims form to strata@marsh.com.
  2. Once Marsh has received all required information, the claim will be registered and sent to the relevant insurer within 1 business day. 
  3. After all relevant information has been received and any necessary enquiries have been completed, the insurer will aim to respond within 10 business days. 
  4. Claim updates are provided by the insurer to claimants as agreed, or Marsh will issue written acknowledgement to the notifying party (intermediary or direct customer) every 10 days. 
  5. Marsh will make reasonable efforts to share updates as soon as they become available. 
  6. In most circumstances, the insurer aims to determine the claim within 4 months of lodgement, although this may be affected by exceptional events such as catastrophes or delays in receiving responses.

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Build-to-rent developments retain residential lots under an owner, developer, managed investment trust or other entity and lease the units directly to tenants. Insurance arrangements can combine building cover with rental-specific landlord cover, depending on the asset and policies arranged.

Strata insurance generally focuses on the building, common property and certain fixtures. A build-to-rent asset can also have rental-specific exposures, such as tenant-caused damage, rental income and rent default, which may require separate landlord cover.

Key considerations can include insured damage to the building, loss of rent, tenant-related damage, rent default, liability, underinsurance and changes in occupancy or use. The relevant risks and cover will depend on the asset and policy terms.

They can be relevant. Policy wordings may treat short-term rental, holiday letting and other occupancy arrangements differently, and some policies require certain changes in occupancy or risk to be notified.

A broker can review the risk profile, consider how building and landlord policies work together, approach insurers, negotiate placement and renewals, and support clients through claims.

Depending on the asset, relevant services can include asset valuations, property risk engineering, natural catastrophe modelling and emergency planning. These services can help inform insurance and risk-management decisions.

Need to make a claim?

  1. Download a claim form here.
  2. Complete all sections of the claim form.
  3. Send your completed claim form to strata@marsh.com.
  4. Marsh will lodge the claim with the insurer and advise on the next steps.

This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances.

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238 983) (“Marsh”) and Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238 369) (“MAI”) arrange the general insurance (i.e. not the Discretionary Trust Arrangement) and are not the insurer.

Discretionary Trust Arrangements are issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417 964) (“JGS”). Any advice or dealing in relation to a Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). The cover provided by a Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.

For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements (PDSs) available from the relevant product issuer. Target Market Determinations (TMDs) are available here.

Marsh, MAI, JGS and JLT are all businesses of the Marsh group.

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