Case 1: Insurance pays for tenants defaulting & repainting
We regularly submit and manage many insurance claims on behalf of clients. Some claims relate to tenant default, others storm or weather damage and other various loss events.
Having the right insurance is important to ensure that you are sufficiently covered and not ‘under insured’ when it comes to claim time.
Recently we had a tenant default on their rent and vacate the property, without notice. No matter how strict our arrears policy or tenant application vetting, there is always the exception which can result in tenant default.
In one particular instance, the property owner had the right insurance, a Landlord Protection Policy, that covered up to 6 weeks of loss of rent. The insurance not only covered for the tenant’s default, but it also covered for the repainting of the property interiors, that had been marked by the tenants during their time living in the property.
Our office was able to arrange all the necessary repairs and find a tenant quickly. The policy used the tenant’s rent bond as payment for insurance excesses. We managed the entire claims process for the Landlord and despite the original tenant difficulties, the silver lining was – no out of pocket expenses.
Case 2: Insurance had high excess and did not cover for rent
In contrast, we had another insurance claim resulting from a plumbing leak that caused damage to adjacent room’s walls and carpet. To rectify the damage significant work was required that resulted in the tenants having to relocate for a short period.
The Property Owners did have a building insurance policy, but it had a very high excess and did not cover loss of rent. The high excess & loss of rent resulted in significant out of pocket expenses. The property owners also had to cover the cost of the tenant’s relocation.
It is important to get the right insurance policy for your property. Some tips to assist in get the right insurance are as follows –
- Carefully reading the Product Disclosure Statement (PDS)
- Understanding the exclusion
- Engage an Insurance Broker
- Make sure you are not under insured