COvid-19 and landlord insurance

Discussion in 'Property Management' started by paulF, 20th Mar, 2020.

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  1. paulF

    paulF Well-Known Member

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    Anyone received any updates from their insurer in regards to the Covid-19 situation ?

    I Hold a landlord insurance policy with EBM and received an email about what's covered and not covered during the Covid-19 epidemic.
    Below is an excerpt from the email they sent that kind of didn't sit well with me.

    "If a tenant tests positive for Coronavirus, is unable to work for a period of weeks, and falls behind in rental payments, the losses are unlikely to be covered under EBM RentCover policies."

    My questions is why is it unlikely that i will get paid in case of the tenant getting sick and not getting being able to pay rent.

    I can understand there might be thousands of cases which might cripple insurers but from my point of view, what difference does it make if my tenant is sick, done a runner or whatever the case might be. A rent loss is a rent loss.
     
  2. marmot

    marmot Well-Known Member

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    I think most insurers dont cover for acts of war , pandemics etc.
     
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  3. Shazz@

    [email protected] Well-Known Member

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    I don’t think you read the email properly.


    If my tenant loses their job due to the economic outlook (which stems from the Coronavirus) and stops paying rent, will I be able to recoup costs through my insurance?
    This would be treated as any other loss of rent claim and would be covered up to six weeks under rent default (as long as it meets the usual T&Cs of the policy). In this situation, the tenant has lost their job as a result of the economic impact of the Coronavirus. However, the reason for not paying rent is because they have lost their job. Therefore, the policy would respond.
     
  4. paulF

    paulF Well-Known Member

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    Not sure what i'm missing. Doesn't the below contradict your post? Apologies if i'm being slow...

    If my tenant gets Coronavirus and can’t work or pay rent, am I covered?
    If a tenant tests positive for Coronavirus, is unable to work for a period of weeks, and falls behind in rental payments, the losses are unlikely to be covered under EBM RentCover policies. However, remember that the amount of weeks they are likely to be unable to pay rent is low. According to the World Health Organisation, people with mild illness recover in about two weeks, or six weeks in more severe cases. That is two weeks (or a maximum of six weeks) of lost rent which the tenant may be able to catch up on with encouragement and support from the landlord or property manager.
     
  5. shorty

    shorty Well-Known Member

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    If they get coronavirus, you don't get paid. But if they lose their job because of the economic downturn caused by coronavirus, you do get paid.
     
  6. paulF

    paulF Well-Known Member

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    Thanks for that. And as per marmot above, pandemics, wars ... are not covered which is fair enough.
     
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  7. Gen-Y

    Gen-Y Well-Known Member

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    I have emailed my landlord insurance earlier this week. Still not heard any official reply from them.
    I have made a post on PC chat earlier in the week about this specific matter. Don't assume it is all okay. Get onto your insurance company pronto.
     
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  8. Lil Skater

    Lil Skater Well-Known Member Business Member

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    I read it that it would be business as usual for loss of rent, Ie. same eviction process.

    However if they don’t pay and the catch up or they don’t pay and you allow them to stay and forfeit the rent for the period they don’t pick up the tab.

    @Sharon Fox-Slater perhaps you can confirm? :)
     
  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    LL insurance doesnt cover illnesses. Its an arrears cover for default. This requires a legal default to exist a action through a eviction, tribunal etc. A ill tenant with arrears would subsequently need to default leaving a loss (eg shoot through, bankruptcy) . A landlord and PM need to consider arrangements which limit this arrears and assist the tenant to repay the shortfall if one is created.

    A LL cant just claim because they didnt get paid on time.
     
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  10. Sharon Fox-Slater

    Sharon Fox-Slater Member Business Plus Member

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    Hi there. Thanks for linking me in! Whether a claim is paid or not is very dependent on the 'reasons' why the tenant is defaulting on rent (if they fall ill, we may not cover it, but if they are facing financial hardship, we may cover it). With this situation, as it is evolving each and every day, we ask that you submit claims for review so we can take the personal circumstances of each of our clients into consideration. The best piece of advice I can give you at the moment is to continue following all of the correct procedures set out in your state e.g. issuing breach notices on time. This way, when it comes to making a claim, we can see you worked to mitigate loss.
     
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  11. Hetty

    Hetty Well-Known Member

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    Thanks for the info Sharon. What about dropping rents due to financial hardship, would this affect our insurance?
     
  12. Sharon Fox-Slater

    Sharon Fox-Slater Member Business Plus Member

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    Hi Hetty. We know this is a tough time for everyone and people want to do their part to support one another. So, if landlords want to put measures in place to support a tenant through this difficult time, that is up to them. Specifically, if you agree to reduce rent, this will not impact cover (if you are with EBM RentCover). However, you are unable to claim for the difference in payments. You can find more info about how COVID-19 impacts landlord insurance here: COVID-19 update: FAQs and the impact on landlord insurance.
     
  13. Hetty

    Hetty Well-Known Member

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    Yes, I am with EBM. That’s great, thank you :)
     
  14. Annaelsa

    Annaelsa Active Member

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    If tenant is facing financial hardship because partner move out. It's already arrears for 3 weeks now.

    What's the process to make claim during this penamic time?

    Can I claim while tenant still live in the property?

    I have EBM rent cover policy but never claim before.
     
  15. wylie

    wylie Moderator Staff Member

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    Are you self-managing?

    You need to issue notices at the correct times. Have you done that?
     
  16. Annaelsa

    Annaelsa Active Member

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    I have PM manage my property but I haven't heard from PM yet.

    Tenant also still haven't paid water usage and damaged bill.

    May I know what is the correct time of notice to be issued?

    Is eviction necessary? I feel for the tenant but I also feel for myself and family too as Im in the tough situation as I'm a carer of a very young disability child. I rely on rental income to support to pay the rent I currently live.
     
  17. Lil Skater

    Lil Skater Well-Known Member Business Member

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    If this is in NSW maybe @Hayley Cannon can answer as the processes are different state to state.

    I imagine NCAT is just as snowed at the minute, which means hearing times may blow out so really need to be on top of it all.
     
  18. Hayley Cannon

    Hayley Cannon Member

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    In NSW you can issue a termination notice after the tenant is 14 days in arrears. You will then be able to apply to NCAT. If this has not been done yet i suggest issuing the termination immediately. There is a back log with hearings.

    There is proposed new legislation seeking a halt on evictions for 6 months in "certain circumstances", these circumstances have not been clarified yet. I would have for you to be stuck with a bad tenant if you are not allowed to evict them in a timely manner.

    You cannot claim on insurance while the tenant is residing in the property.

    I would follow up with your PM asap.
     
  19. Annaelsa

    Annaelsa Active Member

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    Thank you very much, Hayley
    My PM didn't notify me about the arrears at all. I found out from my online account.
     
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  20. Lightie

    Lightie Member

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    You need to get a good pm. You pay for what you get. I have a tenant who has lost his job and isnt making any attempt.to pay any portion of rent like the problem is going to go away my pm is sending all the correct notifications to him. Sucks because hes late quite often on rent but has been there for 5 years so itd be good to keep him there.
     
    Last edited by a moderator: 27th Mar, 2020
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