Granny Flat Insurance

Two dwellings on one title changes how a landlord policy needs to be set up. We work to get the granny flat, the main house, and the sheds in between properly covered.

Dwellings, one policy

$2.5-5.8K

Recent annual premiums

Structure checks that matter

Recognition

THE SHORT ANSWER

Whether your granny flat is covered by your landlord insurance depends on whether it's declared and how the policy defines the insured building. If the insurer knows about the second dwelling and the sum insured covers both buildings, cover generally extends to it, subject to policy terms. If it isn't declared, you can face underinsurance or a dispute at claim time.

Tank arranges landlord cover for granny flats, dual-occupancy properties, sheds and outbuildings, with the sum insured set across every structure on the title and loss of rent reflecting each lease. If your current policy predates the flat, we'll review it and restructure the cover where it needs it.

01WHAT'S INSURED

What a Properly Structured Policy Covers

A landlord policy set up for a dual-occupancy property should pick up every structure on the title. Here's the shape of it, subject to policy terms, limits and exclusions.

What's covered	Key exclusions and considerations
Main dwelling and granny flat - fire, storm, escape of water, impact and other insured events	Both dwellings must be declared; an undeclared second dwelling can cause problems at claim time
Sheds, garages, carports and other outbuildings on the same title	Sum insured must reflect them; commercial use of an outbuilding needs to be disclosed
Loss of rent across both dwellings after insured damage	The limit should match combined rental income, not just the main house lease
Legal liability as property owner	Occupancy arrangement (one lease, two leases, owner plus tenant) affects how the risk is rated
Tenant damage and rent default (where selected)	Availability varies by insurer and occupancy mix; short-stay letting is usually treated differently
Fences, retaining walls, paths and other improvements	Often sub-limited; check the figures against what's actually on the property

GRANNY FLAT QUOTE

Get your granny flat properly covered

Tell us about the property - both dwellings, the occupancy setup, and the rent each earns. We'll structure a landlord policy built around everything on the title.

Open quote form

02GETTING THE STRUCTURE RIGHT

Six Things That Decide Whether Your Cover Actually Works

The granny flat itself isn't the hard part. It's making sure the policy reflects the property as it stands today.

Declare the Second Dwelling

The insurer needs to know there are two dwellings on the title, how each is occupied, and who lives in them. If the granny flat isn't declared, the policy may not respond the way you expect at claim time, subject to its terms.

Sum Insured Across Both Buildings

The building sum insured should reflect the full rebuild cost of the main house, the granny flat, and everything connecting them - driveways, fencing, retaining walls. A figure set before the flat was built can leave you underinsured.

Separate Leases and Dual Occupancy

One tenant across both dwellings is a different risk to two separate leases, or an owner in the front and a tenant in the back. Each arrangement is rated differently, and some insurers only write certain configurations.

Sheds and Outbuildings

Sheds, garages, carports and studios generally fall under the building definition when they're on the same title, subject to policy terms. Larger structures, or anything used commercially, should be called out specifically.

Loss of Rent Per Dwelling

If both dwellings earn rent, loss of rent cover should reflect the combined income. Two leases at $500 a week is $1,000 a week of exposure if the property is damaged and both tenants have to move out.

When the Policy Needs Restructuring

Some landlord policies handle a declared secondary dwelling comfortably. Others cap the number of dwellings, or exclude dual occupancy altogether. When the standard product doesn't fit, the cover needs to be restructured or moved to a market that writes it properly.

What it costs: Tank has recently arranged landlord cover for dual-occupancy and granny-flat properties with annual premiums between approximately $2,500 and $5,800, depending on sum insured and location. Your property will be rated on its own details.

CLIENT SUCCESS

Two Dwellings, One Title: How These Risks Actually Get Placed

Recent Tank placements, anonymised. Premiums are approximate and reflect each risk at the time - not a guide to future pricing.

01 A new granny flat the policy didn't know about

A Sydney landlord had built a new granny flat behind an existing investment property, taking the building sum insured to around $4 million across the two dwellings. Their existing policy hadn't been updated to reflect the second dwelling.

Tank restructured the cover with both dwellings declared and the sum insured set across the whole property. That's the fix in a nutshell: get the policy matching the property before a claim tests it.

THE RESULT:

Cover placed with CGU at approximately $5,400 a year.

02 Main house and granny flat on separate leases, struggling to find cover

A Northern Beaches landlord had a main house and granny flat on separate leases and was struggling to insure both. Three markets declined because there was more than one dwelling on the title, and a fourth would insure only the main house.

Declaring both dwellings mattered even though the owner initially only wanted the main house insured - leaving the flat off the policy would have left part of the property, and part of the rent, exposed. The placement needed a market willing to write both dwellings and both leases together, with combined building sums insured of $1.2 million.

THE RESULT:

CGU covered both dwellings under one policy at approximately $5,800 a year.

03 An uninsured 1910 house, two tenancies and a rented granny flat

A regional Victorian property was sitting uninsured: a main house dating to 1910 and configured as two rental tenancies, a separately rented granny flat, and a shed. The house had been rewired and replumbed in 2021.

Tank approached five markets: four quoted and one declined. The older construction didn't prevent placement - what mattered was disclosing the three-tenancy configuration, the 2021 upgrades, realistic sums insured and the fire and security protections up front, so each underwriter rated the property as it actually stood.

THE RESULT:

Building and contents cover placed with CGU at approximately $2,500 a year.

04 Two homes on one title, insured together

A Southern Highlands family needed building cover for an existing 1980 home and a newly completed 2026 second dwelling on the same title. One insurer required separate policies and another couldn't offer terms for the two homes together.

The certificate of occupancy for the new dwelling, plus a clear description of how the property actually stood, let the risk be assessed as it existed on the start date.

THE RESULT:

Blue Zebra covered both buildings at approximately $3,400 a year, with a combined $1 million building sum insured.

Premiums and outcomes described are specific to each client and indicative only. Your own terms will depend on your circumstances and the insurer.

GRANNY FLAT FAQS

Common Questions About Granny Flat Insurance

01 Is my granny flat covered by my landlord insurance?

It depends on whether the granny flat is declared on the policy and how the policy defines the insured building. If the insurer knows about the second dwelling and the sum insured reflects both buildings, cover generally extends to it, subject to the policy terms. If the flat was built after the policy started and never declared, you may face underinsurance or a dispute at claim time. The safest move is to check what's actually noted on your schedule, or ask us to review it.

02 Do I need a separate policy for a granny flat?

Usually not. Where the granny flat sits on the same title as the main house, most configurations can be covered under one landlord policy with both dwellings declared and the sum insured set across the two. A separate policy tends to come up only where the occupancy mix or the insurer's rules don't allow both dwellings on one product. We look at the setup and tell you which structure fits.

03 Are sheds and outbuildings covered by landlord insurance?

Sheds, garages, carports and similar outbuildings on the same title generally fall within the building definition of a landlord policy, subject to its terms. The catch is the sum insured - if it was set on the house alone, the outbuildings may not be fully reflected in the rebuild figure. Large sheds, studios or anything used for business purposes should be declared specifically.

04 What happens if I built a granny flat and didn't tell my insurer?

If the policy hasn't been updated to reflect the second dwelling, two problems can arise. First, the sum insured may be too low to rebuild both structures, which means underinsurance. Second, the insurer assessed and priced a different risk to the one that exists, which can complicate a claim depending on the policy terms and your disclosure obligations. It's fixable - the policy gets updated or restructured - but it's far better done before a claim than after.

05 Can I insure a property with two dwellings on separate leases?

Yes, though not every insurer writes it. Two dwellings on one title with separate leases is a dual-occupancy risk, and some standard landlord products either load for it or won't accommodate it. Tank has arranged cover for exactly this setup, including a Northern Beaches owner with a main house and granny flat on separate leases. Three markets declined because there was more than one dwelling, and a fourth would only insure the main house. CGU covered both dwellings under one policy at approximately $5,800 a year. Before approaching any market, we clarify the configuration, the lease arrangements and how each dwelling is occupied, because that's what decides which insurers can write it.

06 How much does granny flat insurance cost?

Tank has recently arranged landlord cover for dual-occupancy and granny-flat properties with annual premiums between approximately $2,500 and $5,800, depending on sum insured and location. The occupancy mix, the age and construction of both dwellings, and the address all move the figure, so treat that as a guide rather than a quote. Even a 1910 main house split into two tenancies with a separately rented granny flat came in at the lower end of that range once the rewiring, replumbing and protections were properly disclosed.