How to claim loss of rent on landlord insurance

Owning an investment property comes with certain risks – one of them being the loss of rent following a severe weather event or due to non-paying tenants. According to our AAMI Landlord Insurance claims data (March 2022 – March 2023), we found that 10.2% of all landlord insurance claims involved loss of rent being claimed.

So it helps to know what your policy covers and how you can claim.

Is loss of rent covered by Landlord Insurance?

With AAMI Landlord Insurance, loss of rent may be covered following an insured event, such as:

• flood
• storm and storm surge*
• fire – including bushfire, and
• impact – from things like a falling tree or a power pole.

If you have building cover and the building can’t be lived in or re-leased after an insured event, we will pay the weekly rental amount for the time it should take to repair or rebuild. The longest period we will pay for one incident is 52 weeks. The most we’ll pay in total is up to $25,000.

If you have landlord contents cover in a unit, and an insured event damages your contents – like the carpet or floating wooden floors – such that the insured address cannot be lived in, we will pay the weekly rental amount for the time it should take to repair or replace those contents. The longest period we will pay for one incident is 52 weeks. The most we’ll pay in total is up to $25,000.

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Loss of rent is not covered if any of the following apply:

• You don’t have a rental agreement.
• The tenant still has an obligation to pay rent.
• The insured address was not occupied by a paying tenant at the time the damage occurred. However, we will provide cover if it would have been rented, and you give us evidence of this, during the time taken to repair, replace or rebuild the building. You may be able to show this by a signed tenancy agreement from a tenant that was due to move in.

There are other exclusions and limits – for the full list see the PDS.

Tenant Protection optional cover

If your tenant stops paying their weekly rent, having the Tenant Protection optional cover on your AAMI Landlord Insurance policy will help protect your rental income.

Under this optional cover we will cover you for loss of rent, if during the period of insurance the following applies:

• Your tenant stops paying their rent but does not leave the property. However, you must have taken all steps available to you under the relevant residential tenancy legislation to remedy non-payment and evict the tenant.
• Your tenant stops paying their rent and permanently leaves the property without giving you written or verbal notice as required under your written rental agreement. However, you must have actively sought a new tenant to replace the old one.

There are limits on the loss of rent that we will pay – see the PDS for more details.

This optional cover also includes three additional benefits:

• Cover for theft or burglary by tenants or their guests.
• Cover for malicious acts or vandalism by tenants or their guests.
• Cover for replacement of locks if your tenant leaves the property permanently without giving you notice and doesn’t return the keys.

Exclusions and limits apply under our Tenant Protection Cover, so be sure to read the PDS.

How to claim loss of rental income

Claiming for loss of rent on your AAMI Landlord insurance can be easily done through the AAMI App or online.

If the claim is for loss of rent following an insured event and your claim is covered under your building cover, we’ll engage a builder to assess your rental property and determine how long the repairs or rebuild should take. For example, if you have a claim for fire damage to the kitchen and our builder determines that the repairs should take 4 weeks to complete, then you may be entitled to 4 weeks of loss of rent under this cover.

If you’re claiming loss of rent due to a non-paying tenant, provide a copy of your signed rental agreement and any messages you or your agent may have had through email or text with the tenant regarding the rent – as well as an outline of all legal steps you’ve taken to recover the missed payments.

Whether it’s non-paying tenants or extreme weather, AAMI can help you get peace of mind knowing your rental income is protected.

Make a claim

Read more:

• What could landlord insurance cover?
  
• How and why to avoid underinsurance
  
• How to make a home insurance claim
  

*Actions or movements of the sea and storm surge are not covered (unless the storm surge damage occurs at the same time as damage caused by storm). Other exclusions apply.

AAMI Landlord Insurance is issued by AAI Limited ABN 48 005 297 807 trading as AAMI. This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available.