Scott's Weekly Column

Landlords insurance woes

I cannot overemphasise the importance of having the correct landlord insurance in place for your investment property.

Recently a landlord had the misfortune of believing that they had landlord insurance in place for their investment property with their major corporate insurance company only to find when they went to make a claim they were not covered.

In brief a tenant stopped paying rent and the process was followed through NCAT (rent tribunal) to have the tenant removed from the property and claim for unpaid rent and any damages. NCAT made the order to remove the tenant and awarded the landlord a tribunal order for outstanding rent for the period of arrears and damages.

 A professional landlord insurance company would at that point paid the landlord all the outstanding monies awarded under the tribunal order by NCAT and then commenced proceedings to recover the outstanding amount directly from the tenant. Unfortunately, this landlord had an (all in) policy with their home and contents insurance with one of the major corporate insurance companies. In the fine print of the policy was a clause that the insurance company would only pay rent whilst a fixed term lease was in place for the rental property. The insurance company deemed that because the fixed term of the lease had expired a month previously that all rent due after that date was not claimable. Also, all repairs and rubbish removal were not paid as it could not be established that the damage occurred during the fixed term or afterwards, and the rubbish was removed after the fixed term of the lease expired so was not payable.

In summary the landlord was out of pocket $3500 due to the “fine print”.

Landlord insurance is available as a “stand alone’ policy through several specialised landlord insurance companies, the cost, about $1 per day. Considering this recent case, I would recommend all landlords review their landlord insurance policy to ensure they are properly covered, especially if its part of your general cover with a major general insurance firm and not a “stand alone” policy.


Have a great weekend!