Landlord Insurance: COVID-19
All Cubbi COVID-19 articles are in progress and will continue to update. We are actively improving Cubbi as you read this article. In the meantime if you have any questions please do not hesitate to contact us.
As a Owner you want to know if you're protected by Landlord Insurance if your tenant does not pay rent during COVID-19.
The below is general advice and may not be relevant to your policy and your situation so please check with your provider before making any decisions. Use this as a guide only.
Can rent default be claimed if the tenant is unable to pay rent due to COVID-19?
Yes in most cases however see the below two important questions..
Can a shortfall be claimed if the landlord and their tenant mutually agree to a reduction in the weekly rental payments? (essentially where you reduce the rent owing by the tenant)
No, the difference in weekly rent is not claimable as this is a mutual agreement between the landlord and tenant.
Can rent default be claimed if the landlord and their tenant mutually agree upon a suspension of their rental payments? (essentially where you allow your tenant to defer payments)
No, as this is a mutual agreement between the landlord and the tenant.
I don't have Landlord Insurance. Can I get it now?
Most insurance providers are not taking on new business right now however AON have said: " From 5pm AEST, Friday, 3 April 2020, CGU will not be able to offer ‘Rent default and theft by a tenant]’ cover on new policies. The cover will remain on all existing policies.". Therefore if you don't have Landlord Insurance right now, it's highly recommended you get it while you can! Click here to apply. (we don't get any commissions for this)
Our Recommendation as at 10am 1st April 2020: As a landlord you're in a really tight spot because if you agree to reduce the rent or defer payments with your tenant, it's unlikely you'll be covered by your Landlord Insurance however if you don't agree and eventually end the tenancy you should be able to claim. Note that if you delay too long in sending a termination notice (subject to new Eviction laws) you may not be able to make a successful claim (because this may not be seen as reducing the risk of the claim). For example, lets say your property is in Victoria, you can send a termination notice if the tenant is over 14 days behind in rent but lets say you let your tenant fall 2 months behind in rent before sending a Termination Notice. Your insurance company may see that you have not acted quick enough to reduce the risk and so you may not be covered the full amount or anything at all. Again, check your with your own insurance provider.