Four claims we settled in 2023

As 2023 draws to a close, we look at four claims that show the diversity of risks impacting investment properties and how we helped the landlords who own them… 

“It’ll never happen” is a prophecy many landlords have uttered – only to find that it can and does happen, with what can sometimes be disturbing regularity! Claims for insured events at investment properties are made every day – in fact, we received more than 5,300 claims in 2023 and paid out about $47.5 million. 

Insurance is clearly a safety net for when that something that will never happen, actually happens and the landlord finds themself looking at a repair bill that they certainly weren’t expecting and are even more unlikely to have budgeted for. Five and even six-figure bills can potentially financially ruin a landlord if they aren’t adequately insured.  

Doubtful? Take a look at the costs associated with these four claims… 

The 10-month-long saga… 

Having defaulted on their rent, the tenant was issued with a termination notice – which they ignored. Not only didn’t the tenant vacate as per the notice, they also didn’t get up to date with the rent. So, the agent had to apply to the tribunal for possession. It turned out to be the first application of many – in fact, 19 in total. The tenant constantly requested adjournments and appealed all the tribunal orders. Despite the stalling and protestations, possession was awarded to the landlord, and they got their rental back. But not before 316 days had passed since the termination notice was first issued and legal expenses had been incurred. The claim for 316 days’ loss of rent (four days for rent default and 312 days of denial of access) and legal expenses was settled at a cost of just under $14,000.  

Water, water everywhere… 

A pipe leaked in the bathroom of the landlord’s unit within a strata complex. The water caused damage to the carpets and floorboards underneath throughout the unit. The strata company’s insurer took six months to arrange for the repairs to the building structure and common services/areas (which is the limit of strata insurance responsibility), so the extent of the water damage to the landlord’s property (the floor coverings, for which they were responsible and had insured with EBM RentCover) was increased. Once the underlying issue with the pipework was addressed by the strata company, EBM RentCover approved a repairer to carry out a full carpet replacement (just shy of $12,000) and take up and remove the floorboards underneath (a little under $10,000) so they could be replaced by the strata insurer (as these are part of the structure of the building). That one leaky pipe resulted in a claim worth more than $21,000.       

One hellava mess left behind… 

It started with the tenant falling into arrears and causing issues with the neighbours and council – and ended with a $50,000-plus insurance payout. The arrears started in December 2022 and the tenant was finally evicted via a warrant of possession in June 2023. But when they vacated, they left plenty behind. Piles of rubbish and filth, which cost almost $15,000 to clean up. Malicious damage to the walls, doors, flyscreens, blinds, lights, carpets and ceilings added more than $23,000 to the mounting bill. By the time loss of rent (for the arrears and also for the 80 days it took for the repairs to be completed) and legal expenses were added in, the total was just short of $57,000.     

Puppy did a bad, bad thing… 

An irresponsible pet owner and a dog with a penchant for chewing things left the landlord with a $1,400 repair bill. The damage was discovered when the tenant moved out, with the exit report photos clearly showing that sections of floorboards and skirting had been chewed in one room. It also showed that the dog had managed to get hold of a pen and proceeded to chew it to bits in the bedroom – the bits were still on the carpet, along with the ink stains. The payout covered the repairs to the floorboards, skirting and carpet.   

These claims illustrate the value of having landlord insurance. It’s usually only with a specialist policy that the unique risks associated with owning an investment property are covered – things like loss of rent, and damage caused by tenants, their guests and their pets. Without the right cover, these landlords would have been left to foot the expenses on their own – and while a $1,400 damage bill might have been relatively easy to cover, the same can’t be said for a $14,000, $22,000 or $57,000 bill. 

If you have questions about our landlord insurance policies, get in touch with a member of our Expert Care team – 1800 661 662.