Lessons learned – claims we received in 2024

2024 has drawn to a close so we are looking at how we’ve supported our policyholders by paying out millions of dollars of claims…

There’s rarely a dull moment in landlord insurance! From loss of rent to the wrath of mother nature, accidental damage to theft, and many other insured events in between, every year, thousands of landlords make claims against their EBM RentCover policies. And 2024 was no exception. Just look at these figures: 

• We settled 4,835 claims – that’s an average of 21 claims a day 

• We paid out $44.5 million 

Without landlord insurance, more than 4,581 investment property owners would have been left to foot the bills for damage and loss of rent. Landlords like these… 

Claim example one – when the worst happens 

Little did the landlord know that when they went overseas that they would return to find their rental trashed.  

It was the neighbours who sounded the alarm on the property being misused, so the landlord requested their property manager make a routine inspection. It was found that significant damage had been caused to the rental – leading to the tenant being given notice to vacate. Unfortunately, notice was not provided correctly, which allowed the tenant to remain in the property longer. The tenant put that extra time to use – further damaging the property. The tenant was eventually evicted with a police presence, and the full extent of the damage was revealed. 

Among the wreckage caused by the tenant were damaged front gates where a vehicle had been used to try to force entry, structural damage to the interior including meth contamination, damage to the exterior of the property including unauthorised building work requiring demolition, asbestos buried in the back yard, and all manner of contents left onsite. In total, a claim for $114,000 for damage was made. A further claim of $12,500 was paid for loss of rent. Note: this claim is still being finalised and the total payout amount is still being determined.   

Heads up! While carefully vetting prospective tenants and putting the management of the rental into the hands of an agent can help reduce the risk of tenant-related claims down the track, it is not infallible. That is why it is important to have a landlord insurance policy that includes cover for a range of tenant-related risks. In addition, it is important that the correct procedures for evicting a tenant are followed to ensure that the landlord does not incur losses that cannot be recouped from their insurance. It is also good to know that EBM RentCover is one of the only landlord insurance providers that offers cover to clean up drug labs and meth contamination.  

Claim example two – when your guest is light-fingered 

Like many short-term rentals, the landlord’s investment property was fully-furnished and fully-equipped with all the things a guest could need for their stay, including entertainment with a home theatre system, gaming console and controller, portable Bluetooth speakers and a Wifi router. Unfortunately for the landlord, the guest took quite a shine to that equipment – and took it with them when they left. They also cleaned up and made off with the owner’s $1,200 Dyson vacuum! All up, the guest stole more than $4,500 worth of equipment, for which EBM RentCover compensated the landlord. NOTE: Where items are stolen, you must report this to the police before making a claim. 

Heads up! This claim is an example of why it is important for landlords offering their rental on the short-stay market to have tailored landlord insurance. RentCover Short-Term is designed specifically to address the risks faced by owners using their investment property for short-stays, whether through corporate leasing, holiday lets or via a share accommodation platform like Airbnb. RentCover Short-Term is one of the few landlord policies that offers protection for all types of short-stay rentals and provides cover for most contents in the property (refer to the PDS for an exact list of what contents is covered), not just fixed items as is the case with most landlord contents policies.         

Claim example three – where there’s smoke, there’s fire 

Where there’s smoke, there’s fire – and damage claims. Although the fire engulfed the neighbouring property and did not spread to the three-storey unit complex owned by the landlord, it did cause damage to common areas and three of the seven units.  

The complex suffered external damage including broken windows, charred timber cladding, heat damage to PVC pipes, charring of metal posts, cracked lights, warped signage, heat damage to in-ground plants along the common driveway, and around half of the timber paling fence was destroyed. Three of the units also suffered smoke, soot, scorching, charring and heat damage, and cracked and broken windows, requiring the tenants to temporarily vacate. The landlord’s RentCover Platinum policy includes cover for the building, the contents and tenant-related losses. A $186,000 claim was made for damage to the premises (insured events), and included the costs to make-safe, expert reports, restoration and reinstatement. A claim was also able to be made on the contents component of the policy which included restoration and replacement costs, totalling $16,000. In addition, $15,000 for loss of rent was claimed. In total, the claim was for $217,000. 

Heads up! There are several conditions of cover in landlord insurance policies and one of these is to act to prevent further loss or damage. The landlord fulfilled their obligation by boarding up the broken windows as soon as it was safe to do so. EBM RentCover’s assigned loss adjusters were on site just days after the fire and arranged for additional make-safe works to be completed.  

Claim example four – when your tenant won’t pay, and they won’t leave 

The tenancy had been going smoothly, until the tenant fell into arrears. The landlord followed the legal eviction process and issued a termination notice after the rent was in arrears for 14 days (as per legislated requirements). The tenant was given 14 days to vacate (again as per requirements in their state) but refused to leave at the end of the notice period. The landlord then had to apply to the tribunal for a termination and warrant of possession order. The tenant did not comply with the order and was later evicted by a sheriff’s officer. Possession was then returned to the landlord. All up, the landlord lost 11 weeks of rent ($5,280) when their tenant decided to stay but not pay.  

The landlord’s $6,100 claim included rent default (six weeks), denial of access (five weeks), lock replacement (as the eviction had been carried out by a bailiff), and legal expenses. 

Heads up! This claim is a reminder that landlords and their agents need to act quickly and within the law when it comes to eviction and loss of rent claims. It is imperative that action is taken swiftly where rent arrears are concerned as there is a limit on the amount of loss of rent that can be claimed for rent default (you should follow the legal eviction process when necessary). EBM RentCover also provides up to $5,000 in legal expenses cover where the landlord/agent needs to go to tribunal or court to evict a tenant.   

Claim example five – when your tenants are hoarders 

TV shows about hoarders might make for light entertainment, but this landlord didn’t find it very entertaining when their tenants left behind a tonne of mess and rubbish. 

Within just five months, the tenants managed to fill the three-bedroom rental with copious bags of rubbish, caused extensive damage, and failed to clean up after their animals.       

The landlord got whiff of trouble not long after the tenants moved in, with neighbours complaining about smells and suspicious activity at the property. An inspection confirmed the worst, and the landlord evicted the tenants. A loss adjuster was appointed to ascertain the extent of the damage, but the property was in such a state that it wasn’t fit for inspection due to all the animal excrement. A specialist cleaner (occupational hygienist) had to put in some hard yards at the premises before the assessment could be made. What it revealed was extensive damage including the need to remove and dispose of kitchen cabinetry and flooring, windowsills and furnishings, wall linings and skirting boards. Comprehensive cleaning and sanitising were also needed. Repair works took 188 days. All up, the cleaning and repair costs added up to some $87,000 (note: this claim is still being finalised and the total payout amount is still being determined). A further $11,000 was claimed for loss of rent. 

Heads up! While more damage is usually caused by tenants than pets, EBM RentCover is one of few landlord insurance providers that offers cover for pet damage. Up to $70,000 is paid for tenant damage (which includes pet damage) and there are no onerous conditions attached to this pet cover such as naming the pet on the lease. 

Claim example six – when yours becomes theirs 

The story begins with two bricks and a thief… The thief used the bricks to smash through a window and gain entry to the house. Once inside, they managed to pull out the air-conditioners and then, for good measure, ripped out some copper piping – stealing around $7,500 worth of goods and materials. Once the cost of repairing the smashed windows and replacing the locks was included, the claim topped $9,000. NOTE: Where items are stolen, you must report this to the police before making a claim. 

Heads up! This claim shows the importance of having the right type of landlord insurance policy. Initially the owner had taken out a RentCover Ultra policy, which covers contents and tenant-related risks. Luckily for them, they had changed to a RentCover Platinum policy prior to the break-in. As Platinum policies include cover for the building, and air-conditioners and copper piping are considered part of the building, not contents, they were able to claim for the loss. If they hadn’t changed over to a building and contents policy, EBM RentCover may not have paid out the claim.  

Lessons learned 

From routine claims to those that are a little more complex, EBM RentCover has been there to support landlords who have suffered losses and has helped them get things back to normal at their rentals.

Before we sign off this article, you might be interested to know what happens when a claim is settled. Depending on the type of claim, an insurer may have a right to recover (also known as subrogation). This basically lets the insurer pursue the person at fault to recover the money paid out for your claim. There are only certain situations where an insurer will act to recover the money paid out. When it comes to EBM RentCover, we typically only recover losses that are the fault of the tenant. For example, if a tenant does not make good on paying their rent, we are likely to try and recover this.To learn more, click here. 

If you have questions about our landlord insurance policies, please reach out to a member of our Expert Care team – 1800 661 662.