Protection

Loss of rent: What is covered and when it applies

For many landlords, rental income helps cover mortgages, rates, maintenance and everyday financial commitments. So, when rent suddenly stops hitting the bank account, the impact can be significant. 

At EBM RentCover, loss of rent claims make up a significant portion of landlord insurance claims. While property damage often gets the attention, our experience shows that loss of rent is one of the most common (and financially stressful) challenges landlords face. 

The good news is that with the right specialist landlord insurance in place, these situations don’t have to be as overwhelming. Understanding what landlord insurance covers and when it applies can help landlords and property managers respond when unexpected situations arise. 

Loss of rent cover 

A specialised landlord insurance policy can provide loss of rent cover in a range of situations where rental income is interrupted. 

At EBM RentCover, cover may apply when: 

• a tenant stops paying rent due to hardship 

• a tenant leaves the property unexpectedly 

• a tenant breaks the lease or absconds 

• a tenant refuses to leave and a court order is required 

• a tenant passes away 

• the property becomes unliveable during repairs and we are covering these repairs
  

Policies differ from provider to provider  

Not all insurance policies are created equal. In many cases, standard home and contents policies won’t include loss of rent cover. Typically, landlords need a specialised landlord insurance policy for this type of protection, and even then, the level of cover can vary significantly between providers. Some policies may exclude certain situations or offer more limited protection. 

When a tenant stops paying rent 

A common claim scenario is rent default. This happens when a tenant simply stops making payments and could be a result of financial hardship or abandoning the property.  

Without insurance, landlords can find themselves out of pocket while still needing to meet ongoing property expenses. 

EBM RentCover provides up to six weeks’ cover for loss of rent relating to rent default, hardship, absconding or a tenant unexpectedly leaving the property. 

When a tenant refuses to leave 

Another stressful situation for landlords and property managers is when a tenant remains in the property after being asked to vacate but refuses to pay.  

In many cases, once a termination notice has expired, the landlord is no longer receiving rent, but they also can’t re-let the property. This can create financial pressure and lengthy delays while tribunal or court processes take place. 

EBM RentCover can offer landlords up to 52 weeks’ cover for loss of rent when a tenant refuses to leave the property and a court order is required for possession. 

When repairs interrupt tenancy 

Sometimes rental income stops through no fault of the tenant or landlord. Following an insured event like a fire or storm, properties may become unliveable while repairs are completed. 

Loss of rent cover during repairs can help reduce the financial strain by providing ongoing rental income protection while the property is being restored. 

At EBM RentCover, this type of loss of rent cover is available for up to 52 weeks. 

After the death of a tenant 

While it’s something no landlord or property manager ever wants to experience, tenant deaths do occur, and the aftermath can be emotionally and financially challenging. 

Depending on the circumstances, properties may become temporarily untenantable, require repairs, or remain vacant for an extended period. 

EBM RentCover offers up to 52 weeks’ cover for loss of rent following the death of a tenant, including situations involving murder or suicide. 

Support for high-value rental properties 

As rental markets continue to evolve, many landlords are leasing properties well above standard weekly rental limits. 

EBM RentCover can provide cover for high-value rental properties with rent of up to $4,000 per week, helping ensure landlords with premium properties have access to appropriate protection. 

Why understanding cover matters 

Loss of rent situations are stressful and financially draining. Having the right landlord insurance in place can help reduce uncertainty and provide support when things don’t go to plan. For landlords and property managers alike, understanding what is covered and when it applies is an important part of managing rental risk and protecting investment income.  

Got a question about cover? Give the EBM RentCover team a call on 1800 661 662.  

*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.