This article was orginally publisehd on 19/03/2020 and was reviewed and updated accordingly on the above date.
It is a seemingly confusing time, as Australia and the world battles what has been dubbed a ‘once in a generation event’.
These distressing and unusual times bring unforeseen difficulties. And unfortunately landlords and property managers will not walk away unscathed from this global pandemic. The Coronavirus outbreak will undoubtedly impact some tenants and their ability to pay rent. And it may, for a period of time, influence the way property managers inspect rental properties.
…most noteworthy, the situation may determine whether or not investors can continue to pay mortgages.
During this time, a lot of you will look to landlord insurance to recoup costs and cover losses. But will the rental property be protected? We answer this question (and others) honestly and transparently, to help you better understand how an EBM RentCover policy will respond during these times.
Can I still take out landlord insurance to protect my rental property?
- Landlords: We have had to limit the amount of new business we are taking on. This is so we can continue offering our already insured clients the service they know and love. However, there are still options available – for a list of policies we are currently offering, click here.
- Agent partners: To support our partners (Corporate Authorised Representatives, Distributors and Referrers) during this period, we have an array of options available. Find out more here.
Just because we may not be able to offer you the cover you are seeking, it doesn’t mean we are not here to support investors. We will continue to update our website with tips and information about how to best manage rental properties during this time. If you are not already, sign up to The Report to get key information straight to your inbox.
How does the government's ban on evictions impact my cover?
At the moment, regulations and changes are in the hands of state and territory governments. This means, each jurisdiction has different processes that must be followed during this time. We have outlined the legislation changes in each area here. If you have suffered a loss, all rules and regulations must be followed before insurance will step in (and before you can submit a claim). However, rest assured, when it comes to making a claim, your policy will still cover what it is designed to cover.
As states are in lockdown, and businesses close their doors, how does this impact the running of EBM RentCover and will I still be able to touch base with the team if I need guidance about my policy?
EBM RentCover will continue to be there for clients in need. However, the way we interact with clients and offer our services may look a little different behind the scenes. This is how things have changed
- Unfortunately, we are only offering certain products at this time. You can find out more here.
- We have seen a higher number of enquiries recently, so it may take us a little longer than usual to respond to you.
- A lot of our team is working from home, so if you want to touch base with us, the best way to do so is by emailing firstname.lastname@example.org.
- EBM RentCover will now be issuing EFT payments for all future claim payouts (no more cheques).
This is a time for leniency and we have recognised our tenants need help. Can we avoid sending late notices and change our processes? What is acceptable and will this impact insurance?
We know this is a tough time for everyone and people want to do their part to support one another. So, if landlords want to put measures in place to support a tenant through this difficult time, that is up to them. This is how insurance may impact a couple of scenarios:
- Reducing rent: if a landlord agrees to reduce rent, they cannot claim for the difference in payments (e.g. if you reduce rent from $500 a week to $250, you cannot recoup the extra $250 a week through your insurer). However, if the tenant continues to default on the newly agreed upon amount, you may have a claim. Using the example above, if the tenant still has trouble paying the $250 a week, you could submit a claim for rent default (however, we would determine the payout amount on the new weekly rent of $250 and not the original $500).
- Putting rent on hold: again, if a landlord wants to suspend rent for a couple of weeks while the tenant gets back on their feet, this would not be covered as it is a mutual agreement and not an insured event. However, if the tenant does not catch up on payments, normal protocols should kick in and then it may fall under loss of rent and the policy would respond.
- Not issuing late notices: all government regulations and guidance in relation to rent default must be followed in order for a claim to be successful.
I have a short-term rental (protected with RentCover ShortTerm) and everyone is cancelling their reservations in light of the Coronavirus outbreak. Am I covered?
Like in a normal situation, if a guest decides to cancel a reservation, that loss is not covered. We only offer ‘loss of rent’ cover when a short-term rental property is so badly damaged that it cannot be lived in or rented out to guests. However, unfortunately if a guest just changes their mind and cancels a booking, that cost is not protected.
If tribunals close, how does this impact a claim?
The good new is, this shouldn’t impact a claim. It is not a requirement in EBM RentCover policies that property managers or landlords go to tribunal.
Can we rely on landlord insurance to protect rental properties during times of pandemic?
It is business as usual for your landlord insurance policy. Pandemics do not alter any of the existing terms and conditions in your landlord insurance policy. In fact, all losses are treated with the usual care and consideration offered by EBM RentCover team members. If you need to make a claim for fire damage – we will review it and the policy will respond. Or, if you need to make a claim because your tenant is two months behind in rent – we will again review it and the policy will respond. Rest assured, just because we are in the middle of a global pandemic, an insurance policy will still cover what it is designed to cover.
Landlord insurance policies are black and white. And all are governed by a Product Disclosure Statement (PDS) which outlines exactly what is and isn’t covered – if you have a policy with EBM RentCover, you can find the PDS here.
How is landlord insurance impacted if there is a ban on rental property inspections due to the risk on personal health and safety?
If inspections can’t be done during this period, it won’t make any difference to the outcome of a claim (however, it is important to note you still need to prove there was a loss or damage e.g. with photos, communication with the tenant, receipts for maintenance).
There is a clause in practically all landlord insurance policies that relates to maintaining the premises and working to prevent future damage or loss. Failure to do so can oftentimes mean a claim won’t be paid. Ongoing property inspections help to make sure you are abiding by the policy terms and conditions. However, we understand these are trying times and the change in the way rental properties are managed will not impact the cover. But, why not get creative? A few of our clients have told us they will be doing video inspections with the tenant and crafting written reports... this will go a long way when it comes to making a claim.
I need to make a claim – is this process still the same?
Yes! We have already invested in innovative technologies to help provide excellent client support from cover to claim. Our online claims portal allows you to easily tell us what happened, provide necessary quotes and invoices, upload documentation and submit a claim. This means you do not need to call or email us – the portal does it all. And, if we have everything we need, our team will work to process and settle your claim as soon as possible.
Important: EBM RentCover will now be issuing EFT payments for all future claims (no more cheques).
If my tenant loses their job due to the economic outlook (which stems from the Coronavirus) and stops paying rent, will I be able to recoup costs through my insurance?
This would be treated as any other loss of rent claim and would be covered up to six weeks under rent default in RentCover Ultra and RentCover Platinum policies (as long as it meets the usual T&Cs of the policy). In this situation, the tenant has lost their job as a result of the economic impact of the Coronavirus. However, the reason for not paying rent is because they have lost their job. Therefore, the policy would respond.
If my tenant gets Coronavirus and can’t work or pay rent, am I covered?
If a tenant tests positive for Coronavirus, is unable to work for a period of weeks, and falls behind in rental payments, the losses are unlikely to be covered under some EBM RentCover policies. However, remember that the amount of weeks they are likely to be unable to pay rent is low. According to the World Health Organisation, people with mild illness recover in about two weeks, or six weeks in more severe cases. That is two weeks (or a maximum of six weeks) of lost rent which the tenant may be able to catch up on with encouragement and support from the landlord or property manager.
What happens if my tenant gets caught overseas, or has to self-isolate, and during this time does not want to pay rent? Is this covered?
This is a question we cannot answer without more information. We would need to look at the claim as a whole, take the personal circumstances into consideration and determine the reason for the loss. So, if you are faced with this conundrum and need to make a claim, please contact email@example.com.
Will the policy offer cleaning/decontamination cover following my tenant having Coronavirus and having to isolate in a rental property?
Bluntly – the answer is no. EBM RentCover policies do not cover general cleaning costs (we only cover cleaning costs as a result of drug labs). It is the tenant’s responsibility to make sure the property is left in the state it was first occupied. If the landlord or property manager has an issue with the cleanliness of a property, they may be able to use the bond to cover costs.
It appears the Coronavirus may impact the need for rental properties. If my tenant is soon to move out and then I can’t secure another tenant because there is little demand for apartments, will losses be covered?
Like a lot of landlord insurance policies, EBM RentCover does not offer protection for changed market conditions when a property is vacant between tenancies. Also, the policy does not cover empty properties that cannot be rented – so, if you are unable to hold house inspections, and therefore unable to secure a tenant, the losses are unlikely to be covered.
What if we lose contact with our tenant (who told us they were going back to China or Europe) and there has been rent arrears – do we need to go to our tribunal to request possession of the property? And then when will insurance step in?
All laws, regulations and processes must be followed during these times. So, if you are unable to reach your tenant, you still need to follow the appropriate steps to gain possession of the property. The good news is, this sort of loss would be covered, in line with the T&Cs noted in the policy, as a normal loss of rent situation.
At EBM RentCover, we are dedicated to looking after our clients during this time. You can find out how we are responding to this ongoing situation here.
While we are working differently behind the scenes, we still aim to offer the same great service you have come to know and love. So, if you need us, we are here. Contact firstname.lastname@example.org if you want to chat about cover and claims.
*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 661 662 if you have any questions.
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