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Common landlord insurance claims
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Common landlord insurance claims

28 Nov 2019

Ever wondered just how many claims are made on landlord insurance policies each year? Or what landlords are actually claiming for? Wonder no more!

Our Expert Care Team has settled more than 6,250 claims in the past 12 months worth a whopping $24 million (approx.). For the mathematically inclined, that’s around 24 claims every business day and an average pay-out of about $3,800 per claim.

And for the cynical among us who think insurers always find loopholes to avoid paying claims, a very impressive 93 per cent of all claims submitted were paid – and many within five working days. 

So where are landlords turning to EBM RentCover for help? 

Tenants did a bad, bad thing

The majority of claims were for some sort of tenant-related issues. This includes situations where you wouldn’t be covered unless you had comprehensive landlord insurance, like loss of rent or accidental damage by tenants. Without specialist cover, landlords would have been left to pay those 3,579 claims worth more than $13.6 million.

You might be surprised to learn that straight loss of rent accounted for more than half of those claims (1,845), while 80 per cent of the accidental and malicious damage claims also included a claim for loss of rent. That’s a double whammy for unsuspecting landlords without specialist cover.

Case in point: rent fault – $7k 
The tenant stopped paying rent and was issued a notice to vacate. The tenant refused to leave and a court order was issued granting possession of the property. However, as the tenant continued to refuse to vacate, a warrant of possession was carried out by the police and the tenant was finally evicted. The landlord was able to make a $7,711 claim as we offer up to six or 52 weeks for loss of rent.

Case in point: accidental damage – $17k 
The tenant fell into arrears and vacated the property. In the final inspection, the agent found multiple stains on the carpets throughout the house, broken blinds, the vinyl in the kitchen had been torn from moving the fridge, there were multiple small holes and divots in walls throughout (some from the door handles), knife marks on the kitchen benchtop, hair dye stains on the ensuite vanity, and torn flyscreens on some of the windows. The $17,430 accidental damage and loss of rent claim was paid.

Rolling in the deep

The top non-tenant related claims were for liquid damage, like pipes bursting, baths overflowing, roofs leaking and sewerage discharging. In the last 12 months, 968 claims were paid worth $2,442,823. 

Water damage was also a recurring theme for the next most claimed insured event – storm. Over the year, 703 claims, worth $2,428,960, were paid for storm and flood impacts.

Around 65 per cent of all insured event claims are for storm/flood/liquid damage each year and overall, water damage claims account for around 30 per cent of all claims. 

Case in point: Burst pipe – $54k 
A water pipe burst under the bathroom vanity. As the rental was vacant at the time, the damage wasn’t discovered until a neighbour noticed water coming out of the property and called the landlord. Most of the home was inundated with water and the flooring, skirting boards, doors and vanities all had to be replaced, at a cost of $54,500. 

Case in point: Storm – $195k
Excessive rain and high winds caused two large gum trees to fall onto the roof of the investment property. The gaping hole allowed water to pour into the property and a tarpaulin couldn’t be erected to cover the roof until a crane removed the trees. While the roof was exposed, extensive damage was caused by rain entering the premises. The cost to repair the damage topped $195,000 and included loss of rent as the tenant had to vacate the house because of the extensive damage.

Don’t go breaking my glass

Windows, shower screens, basins and sinks… 208 claims, totalling $334,983, were made over the year for glass breakage.

Case in point: glass breakage (insured event) – $949
The tenants vacated the property and it was discovered there was damage to multiple windows and wardrobe mirrors (glass breakage is considered an insured event, not accidental damage). Luckily the owner had building insurance and were able to cover the $949 cost to replace the garage window and broken mirrors. 

Start me up (or not)

When you think of things that could go wrong at a rental, motor fusing probably isn’t top of the list. But 144 claims ($225,792) were made in the past year for just that. Culprits include air-cons, fridges/freezers, ovens, stoves, dishwashers, washing machines and dryers. 

Case in point: fusion (insured event) – $1,318
The tenant let the agent know that the air conditioning wasn’t working properly in the property. So, a technician went to the property and discovered the motor had fused. The landlord put in a claim under the property’s Platinum policy and EBM RentCover received a quote to replace the unit. However, it was requested a revised quote be provided to just replace the motor, which was then provided and a claim was settled for $1,318.00.

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Our claims data proves that ‘it’ll never happen’ really is a dangerous mind-set for landlords and property managers to have, especially if it means they forgo specialist insurance cover. So while just three per cent of the landlords we cover needed to claim in the past year, given the value of those claims topped $20 million, those who needed to claim were very glad they had the right landlord insurance in place.

At EBM RentCover we provide support from cover to claim. If you need us, we’re there. Contact us if you want to talk about cover, claims or your insurance needs.  

Main photo by Cindy Tang on Unsplash

*While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you need us we are there, contact 1800 954 374 if you have any questions. 

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