Home Info Centre Certainty in times of uncertainty: the role of insurance during COVID-19
Certainty in times of uncertainty: the role of insurance during COVID-19
Prevention

Certainty in times of uncertainty: the role of insurance during COVID-19

06 Jul 2020 4 mins read

A Q&A with EBM RentCover Managing Director Sharon Fox-Slater

If the COVID-19 pandemic has taught us anything, it is that none of us truly know when disaster might strike. Whether it is a pandemic, bushfire, flash-flooding, or tenant related loss or damage, insurance is there to step in when things go wrong.

While insurance is a necessity for most who want to secure their finances, for others it is a burden and waste of money. However, when things go wrong, the value becomes clear to all. 

EBM RentCover Managing Director Sharon Fox-Slater has been in insurance for more than 30 years and has witnessed the ups and downs of the industry. Although, she admits she has never witnessed anything quite like the impact COVID-19 is having on life and business.

To help our clients better understand what to do during this time, we compiled a few common questions we have been getting asked about the impacts the Coronavirus outbreak has on property investment. Sharon answers them below…  

Why is landlord insurance vital during this time?

Landlord insurance is a safety net when things go wrong. It offers protection for common risks that come with owning an investment property including loss of rent, tenant damage, liability and insured events such as fire, storm and flood. To put it in perspective, in 2019, we paid out in excess of $26 million for all sorts of claims. Without adequate insurance, those unfortunate clients would have had to foot the bill on their own.

How have landlords been impacted most during this time?

While we haven’t seen a great influx of claims, we have seen a great influx of enquiry. This is because there is so much uncertainty, change and mixed-messages that people have been unsure where to turn to for answers.

The majority of enquiry we receive is around the eviction freeze and rental reforms. While the new legislation is designed to make lives easier, there is understandably a bit of confusion around exactly how the changes are set to impact the management of rental properties and what part insurance plays in it all. To help our clients, we provided a state and territory breakdown of the legislation changes and highlighted the rights and responsibilities of landlords during this time.

What is EBM RentCover doing for affected landlords?

We are supporting landlords by continually updating them about the impacts the pandemic has on their insurance.

Our promise to clients is: if you need us, we are here. This has never been more important to us than it is during the COVID-19 pandemic, as landlords are faced with uncertainty and confusion.

As every situation is unique, we are reviewing all claims on a case-by-case basis and working with our landlords and property professional clients to ensure they get the answers they need when it comes to making a claim.

Many insurers have stopped issuing new landlord insurance policies. Why? And will this change?

Insurance is all about risk and it is designed to cover unforeseen events. Due to the current economic climate on the back of the COVID-19 pandemic, one of the main risks  landlords face – rent default – is no longer considered unforeseen. Because the likelihood of rent default has increased, so too has the risk of offering cover to landlords. This has been a big reason for the halt in cover and is the same as halting cover on fire damage when a bushfire is imminent.

In addition, when COVID-19 first hit, EBM RentCover saw an influx of new business enquiries. Because of the huge volumes we were receiving, we couldn’t properly support our already insured clients – this played a huge part in our decision to halt new business, as we had a responsibility to put our existing clients first.

EBM RentCover has been working hard behind the scenes to be able to offer a landlord insurance product during this time. If you are one of our agent partners, you can find more info here. Otherwise, stay tuned – we will update our website when our product offering changes.

What is the most important thing landlords/property professionals should know right now?

In order for a claim to be successful, government directives must be followed. So, if a tenant stops paying rent, the first step in most states is for tenants and landlords to work together to find a solution – one that is agreed upon by both parties. If that fails, then it is time to contact your insurer to discuss option to submit a claim. If a landlord refuses to work with the tenant to find a solution, a claim may be void because they haven’t followed government advice.

Main photo by Markus Spiske on Unsplash

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