Through the minefield

Landlord insurance, which typically covers the building, contents and loss of rental income, has become a tricky product to navigate, especially when claims are made during Covid-19.

Adrian Kelly, president of the Real Estate Institute of Australia (REIA), says insurers have refused to compensate landlords for loss of income in cases where they had negotiated lower rents with tenants.

However, in cases where a residential tenant was suffering genuine financial hardship as a direct result of Covid-19 and could not fulfil their obligations, insurers agreed they would not pursue the tenant for unpaid rent. This has been widely adopted across the industry and hasn’t varied from insurer to insurer, according to the Insurance Council of Australia (ICA).

When governments placed a moratorium on tenant evictions (for six months) in March, most insurers stopped covering tenant-related risks on new policies. However, they continued to honour existing policies.

It’s been a difficult situation for everyone. Governments have urged landlords and tenants to negotiate rents and provide non-eviction periods for tenants who couldn’t pay. While this means rents