What can be claimed from landlord insurance?

My agent said by law we cannot enforce steaming anymore.

It may depend on the state you are in. In Queensland it is absolutely possible to enforce steam cleaning. From the RTA website:

Carpet cleaning and pest control should be specified in the tenancy agreement.
A lessor/agent can specify that carpets must be cleaned or pest control carried out to a required standard, if that was the standard at the start of the tenancy.
If pets are permitted, additional pest control may be specified in the agreement, e.g. flea treatment.
Tenants should be aware of their carpet cleaning and pest control obligations at the start of the tenancy.
If there is any doubt over whether the carpets were cleaned before the tenant moved in, the lessor/agent should be able to prove this.

I always rent places out having been steam cleaned on or after the day the previous tenant vacated, at the previous tenant's expense. And if the premises were empty for any period of time more than a week or so, I also have a pre-tenancy clean at my expense to make sure there are no comebacks -and also because I think tenants have a right to expect this standard from a health and sanitation point of view.

A key point in the above is that you cannot require the vacation clean to be of a higher standard than the one before they moved in - so if no steam when they moved in then no steaming an be enforced on vacation.

If there were a way to clean carpets that matched steam cleaning from the perspective of depth of clean, removal of allergens and pathogens and lack of potentially health-affecting chemical residues, then I guess that would be acceptable, but as far as I know there isn't one.
 
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