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Coronavirus: Can landlord insurance help?

Unfortunately, if your tenant can't pay rent due to the coronavirus, it's unlikely you'll be able to claim on landlord insurance.

Updated

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Real estate

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Looking for landlord insurance?

COVID-19 has changed things. Some benefits, like rent default cover, are on hold. Don't worry though, you can still get cover for fire, storm and non-tenant theft.

On 29 March, the government announced a temporary ban on evictions, in an effort to help thousands of Aussies who have lost their jobs due to the coronavirus. But what does this mean for landlords who rely on their tenants for income?

In this article, we'll explain how landlord insurance is likely to work in this situation, whether you can still get coverage, and how the Australian government is helping out landlords.

warningSome landlord insurance policies have temporarily removed benefits such as rent default and a few others because of the pandemic. Make sure to check this with the insurer before deciding on a policy.

Does landlord insurance cover coronavirus?

If you have rent default cover under your landlord insurance, you may be covered if your tenant can't pay rent due to the coronavirus. However, it will depend on which insurance company your cover is through.

If you do have rent default cover, and your tenant is unable to pay rent, you should contact your insurance company immediately to find out what help is available.

Is it too late to take out landlord insurance?

Many insurers have stopped selling landlord insurance altogether. Those that do still sell landlord cover may have stopped offering loss of rent or tenant default cover options. It is important to note that having landlord insurance does not mean you are automatically covered if your tenant cannot pay their rent.

If you have existing cover with these options you should be aware that the temporary freeze of rental evictions announced by the federal government could impact your ability to claim. The table below shows which insurers still offer new landlord insurance policies as well as tenant protection options.

ProviderAre they still offering landlord insurance?Are they offering tenant default options?Apply
Youi landlord insurance
  • Yes
  • No
Get quote
Coles landlord insurance
  • Yes
  • No
More info
Westpac landlord insurance
  • Yes
  • No
Get quote
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  • Yes
  • No
Get quote
Picture not described
  • Yes
  • Yes
More info
Allianz landlord insurance
  • Yes
  • No
More info
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  • No
  • No
More info
Apia landlord insurance
  • Yes
  • Yes
More info
CHU landlord insurance
  • Yes
  • No
More info
Picture not described
  • Yes
  • No
More info
NRMA landlord insurance
  • Yes
  • No
More info
RACV landlord insurance
  • Yes
  • No
More info
real insurance
  • Yes
  • No
More info
SGUA landlord insurance
  • Yes
  • No
More info
Suncorp landlord insurance
  • Yes
  • Yes
More info
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  • No
  • No
More info
Picture not described
  • Yes
  • No
Get quote

Can I claim if my tenant has left the property?

If you have rental default insurance, you should be able to claim if your tenant has suddenly left their property without giving you proper notice.

For example, your tenant may have been an overseas visitor, who left suddenly because they wanted to be closer to home during the coronavirus pandemic. In this situation, it's likely you will be able to claim if you have rental default cover.

Can I make a claim if my tenant can't pay rent?

If you have rental default cover, and your tenant can't pay rent because they lost their job due to coronavirus, you should contact your insurer as soon as possible, to see if your policy can help.

We analysed the PDSs of 9 brands offering landlord insurance insurers, to see how their rental default insurance might react in this situation.

While most landlord insurance policies require an eviction notice to be served before benefits can be claimed, some brands are waiving this requirement due to the current circumstances.

Remember, as this is an unprecedented situation, insurers may handle claims on a case-by-case basis so it's always worth giving your insurance company a call.

InsurerWhat the PDS saysWhat it means for you
AllianzWill pay if your tenant defaults on rent payments during the period of insuranceAllianz has confirmed landlords can claim for rent default without serving an eviction notice. Allianz is also covering any shortfall due to temporary rent reductions negotiated by landlords and tenants.
CGUWill cover rent default if your tenant stops paying rent owed to you or your agentIAG, CGU's parent company, has confirmed landlords do not need to terminate the lease or serve an eviction notice in order to claim rent default benefits.

Instead, they will only need to supply proof of financial loss. You should be able to make a claim.

ColesA breach notice for non-payment of rent or a notice of termination for non-payment of rent must be issued as soon as practical when the rent is in arrearsYou have to submit a termination notice before your claim would be successful.

However, a Coles representative suggested claims may be considered if the landlord could prove lost income. You may be able to make a claim.

NRMARent default is when your tenant stops paying rent or leaves without giving you notice.IAG, NRMA's parent company, has confirmed landlords don't need to terminate the lease or serve an eviction notice in order to claim rent default benefits.

Instead, they will only need to supply proof of financial loss. You should be able to make a claim.

SGIO & SGICRent default is when your tenant stops paying rent or leaves without giving you notice.IAG, the parent company of SGIO & SGIC, has confirmed landlords don't need to terminate the lease or serve an eviction notice in order to claim rent default benefits.

Instead, they will only need to supply proof of financial loss. You should be able to make a claim.

St GeorgeYou're covered for loss of rent if your tenant leaves your building before the end of the rental period and does not give the required notice, does not pay rent owing and leaves your building without giving the required notice, or is legally evicted from your building.St George policies are provided by Westpac. A Westpac representative confirmed that the tenant would have to leave your property before you can claim for rental default.

Unless they have left the property, it's unlikely you'll be able to make a claim.

SuncorpWe cover if your tenant stops paying the weekly rental amount during the term of your written rental agreement.Suncorp confirmed the insurer won't require eviction notices from landlords during the period of the moratorium.
WestpacYou're covered for loss of rent if your tenant leaves your building before the end of the rental period and does not give the required notice, does not pay rent owing and leaves your building without giving the required notice, or is legally evicted from your building.A Westpac representative confirmed that the tenant would have to leave your property before you can claim for rental default.

Unless they have left the property, it's unlikely you'll be able to make a claim.

WFIRent default benefit will be paid if the tenant defaults in paying rent owed under the terms of the leaseIAG, WFI's parent company, has confirmed landlords don't need to terminate the lease or serve an eviction notice in order to claim rent default benefits.

Instead, they will only need to supply proof of financial loss. You should be able to make a claim.

YouiA rental default is where your lessee occupies the premises without paying the agreed rental payments which leads to the termination of the lease.You must terminate the lease before you can claim on your landlord policy. As evictions are currently banned, this isn't possible for reasons of financial hardship, so it's unlikely you'll be able to make a claim.

A Youi representative confirmed that a lease termination is required for cover to respond.

However, she also added that Youii is working through the "unprecedented situation" to find solutions. You may be able to make a claim.

Will my existing landlord insurance cover claims unrelated to coronavirus?

Yes. While there is some uncertainty around how landlord insurance can help with coronavirus-related claims, you can trust your policy to react as normal with all other issues.

That means, depending on your policy, you'll still be insured for things like fire and storm damage, as well as damage caused by your tenants.

Is there any support for landlords from the government?

At the time of writing, the government hasn't announced any support specifically targeted at landlords. However, new stimulus packages are being announced regularly, so don't give up - things might change in future.

Remember, support has been announced for renters, which should also ease the burden on landlords. Aussies who have found themselves unemployed as a result of coronavirus may be able to claim JobSeeker benefits, while employees who have had their hours cut may be eligible for JobKeeper benefits.

The benefits are designed to help people keep up with their day-to-day expenses, including paying rent.

Picture: GettyImages

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