Nearly a quarter of lessors have no landlord insurance, according to a survey by research group BDRC Jones Donald.

Some 24% lack the cover, which mitigates against damage by tenants and can also include rent insurance, to provide reimbursement when properties become vacant.

Of those who employ real estate agents to manage properties, 81% have the cover, the study of 500 landlords shows. The percentage drops to 54% for those who manage their own properties.

EBM Insurance Brokers MD Jeff Adams says that in his experience the penetration of landlord insurance is even worse than shown in the survey.

“We deal with about 2000 real estate agents and are the largest landlord insurance broker in Australia, and we insure about 15% of the properties they manage,” he told insuranceNEWS.com.au.

He says landlord cover penetration increases slowly each year. “There was virtually none 20 years ago.”

Some 67% of landlords think malicious and accidental damage insurance is “essential or very important”, the survey shows. It is considered “important” by 24% and “of little importance” by 10%.

Rental income insurance is less popular, with 59% considering it essential or very important, 26% important and 15% of little importance.

Mr Adams says damage insurance costs about $300 a year on the average rental property, while rent cover varies with property size and location.

BDRC Jones Donald MD Roger Donbavand says the survey shows landlords’ profits tend to be higher when properties are managed by real estate agents, rather than self-managed.