COVID-19 | Changing insurance landscape

We've been keeping a close eye on public statements from landlord insurance companies in this current times. Suncorp-owned Terri Scheer, joins other landlord insurance companies who advised that it will not be responding to claims for loss of rent as a consequence of a negotiated rent reduction.

So what does it mean for you? The following is what we have been learnt so far:

  • If the landlord agrees to a reduction in the rent for their tenant, then they may not be able to make an insurance claim for that loss of rent. BUT if the Tribunal IMPOSES a rent reduction on the landlord then they should be able to make a success claim – however, each policy is different so check with your insurer first.

  • Insurance will only cover what the tenant is legally responsible for. If negotiations take place and the landlord agrees to a reduction, the tenant is then only responsible for the reduced rent. If they then default, the insurance would respond by paying the rent that the tenant is legally responsible for. The insurer also only has a right of recovery over the reduced rent as well.

Suncorp-owned Terri Scheer has confirmed rent negotations not convered and no longer accepting new clients

The insurance company will not cover landlords for financial losses as it does not consider rent reductions a default by a tenant. At the same time, they w
ill not be accepting new clients during the COVID-19 pandemic climate.

"Given the uncertainty around the COVID-19 situation we have temporarily stopped selling new landlord insurance. Our focus is on supporting our existing customers through this difficult time,” - Suncorp spokesperson for Terri Scheer.

You can read more about it here

If you would like to understand how our Yabonza can shape your property's future in this challenging times, speak with our knowledgable asset managers.

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