Loss of Rent During Covid
Covid has created significant upheaval too many peoples lives. Landlords in both commercial and residential areas have been exposed to the potential of a loss of rent due to their tenant’s inability to meet rental obligations due to business closure, lost revenue or lost employment.
So what can landlords expect in regards to coverage for loss of rent inclusions or exclusions in landlord insurance policies?
Loss of rent: Occurs when a property has been damaged and unable to be rented out.
Rent Default: When rental payments are missed or defaulted on by a tenant.
1: Review your existing Landlord insurance policy?
Check the details of your existing Landlords insurance policy to see if there are inclusions or exclusions in regards to the loss of rental income within your Landlords Insurance policy. Some older landlord insurance policies may have different terms and exclusions than more recent policies. Sometimes insurance policy wording can be complex. Coordinate with a trusted Insurance broker to do a review of your existing insurance policies to see if they are fit for purpose.
2: Have you communicated with your tenant?
Have you communicated with you tenant to gain an understanding of how they are going? If your property is managed by a managing agent, then request an update from them in regards to your tenant. They are able to check in with tenants and understand if there are any changes in their circumstances that you should be aware of. Communicating with your tenant can help to reduce stress, alleviate worry and help you to understand what is going on relatively early in the process.
3: Has a trigger event occurred?
Insurance Policies require a trigger event to spark them into action. With your Landlords Insurance policy, and exploring if you are covered for any loss of rent you may have experienced, you’ll need to check if a trigger event has occurred in relation to your specific insurance policy and your specific experience. Sometimes we may feel like a trigger event has occurred, but you’ll need to see whether your policy aligns with the trigger events you’ve experienced.
4: Communicate with your insurance broker and insurer?
Check-in with your insurance broker and insurer to see if your Landlords Insurance Policy covers you for Loss of rent through your Landlords Insurance. Insurance brokers are working for their clients and across the subtle differences between many different insurance providers and their products. In addition, insurance brokers can assist you in understanding the specifics of your insurance policy and changes in interpretation and legislation. If it has been a while since you spoke with an insurance broker, then make it a priority to get in touch with a broker today.
5: Consider that new Landlord Insurance policies may have changed and may have removed loss of rent due to pandemics (COVID 19)
When renewing your Landlords Insurance or looking for a new landlords insurance policy, consider that the terms, inclusions and exclusions may have changed. Insurance policies evolve and adapt to changing circumstances. A good insurance broker can help you navigate to a landlords insurance policy that is suited to your needs.
If you are a Landlord and you are concerned, then connect with an insurance broker to help evaluate your current position and help chart a path to a more secure future.
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Channelle Ricketts.