Landlord & Building | Vacant Land Insurance - Landlord Select

Landlord Insurance policy protects your investment property against tenant–related risks including loss of rental income and loss or damage by tenants.

Please refer to our Landlord insurance policy Product Disclosure Statement (PDS) which outlines exactly what is and isn’t covered - but we have looked to provide information specifically around the scenario unfolding before us.

To answer some key questions related to Rent Default, COVID-19 and Acerta Landlords policies, we’d like to provide the following, clear and transparent answers:

General questions about tenant default and loss of rent default coverage

Our Residential Landlords policy does cover the Inured Landlord at the Insured Premises for Loss of Rent due to Tenant Default, as long the Tenant default & loss of rent option has been selected (the vast majority of our policies).

As Tenant might Default on the rent due under the rental agreement for a number of reasons, it is important that Property Managers follow the appropriate steps when this occurs - such as issuing arrears notices, notices to vacate etc.

What happens if a tenant falls into financial hardship for any reason?

Our Policy will respond as per the Policy Wording and Policy Schedule. The root cause of the financial hardship will not affect the response of Our Policy. Every Claim is always assessed on its own merits and facts. This means that each case will be assessed on its merits, just as it would have been prior to the COVID-19 outbreak.

What about your ‘quarantinable diseases’ clause?

Our Policy does state that “We will not pay for.. Loss of rent where there is a widespread outbreak of any strain of influenza virus or any other diseases declared as quarantinable by the relevant government authority.”

This exclusion only relates to Tenant Default resulting directly from the premises being contaminated by COVID-19 or similar widespread virus/disease and the Premises requires decontamination. We do not cover the costs of decontamination and/or any subsequent Loss of Rent due to Tenant Default.

In practice, this means that :

Rent default will be covered if the rental default is found to be the result of financial hardship under the standard process.

However, we will not cover costs of decontamination to a property.

We will not cover loss of rest as a result of the contamination and time taken to decontaminate.

We are looking to make some updates to our policies to further clarify this stance, and these will be communicated shortly.