Owning an investment property means planning for more than just maintenance and tenant management. Unexpected events such as storms, floods, fires, or tenant-related issues can disrupt your rental income and place additional financial pressure on you as a landlord.
So, it helps to know whether your policy covers loss of rent, and how you can claim.
What is landlord insurance?
AAMI Landlord Insurance provides cover for loss or damage to the building and landlord contents when you’re a landlord and lease the property to tenants.
Investment properties, much like your own home, can be damaged by insured events such as:
- weather events like storm and flood
- fire (including bushfire), and
- theft.
There are also incidents particular to landlords, such as loss of rental income and damage caused by tenants.
Landlord insurance provides coverage for events like the ones listed above, helping to minimise the loss of both money and assets.
Is loss of rent covered by landlord insurance?
With AAMI Landlord Insurance, loss of rent may be covered if the loss was incurred following an insured event, such as:
- a flood
- a storm or storm surge*
- a fire – including bushfire, and
- an 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’ll pay the weekly rental amount for the time it should take to rebuild or repair the building. The longest period we’ll 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’ll 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.
When doesn’t landlord insurance cover loss of rent following an insured event?
- You don’t have a rental agreement.
- The tenant still has an obligation to pay rent.
- The insured address wasn’t occupied by a paying tenant at the time the damage occurred.
However, we’ll provide cover if the property would’ve been rented during the repair or rebuilding period. You may be able to prove this with a signed tenancy agreement from a tenant who was supposed to move in.
There are other exclusions and limits to keep in mind – for the complete list, see the Product Disclosure Statement (PDS).
Does landlord insurance cover tenant damage and tenant default?
For an additional premium you can add AAMI Tenant Protection optional cover to your policy. This covers you for:
- loss of rent if your tenant doesn't leave, leaves permanently, passes away as a sole tenant, or if there's a Tribunal order
- theft or burglary by tenants or their guests
- malicious acts or vandalism by tenants or their guests, and
- replacement of locks if your tenant permanently leaves without giving the required notice or is legally evicted.
All amounts payable under the Tenant Protection optional cover are in addition to the sums insured that apply to your policy.
Exclusions and limits apply under our Tenant Protection Cover. The PDS has all the information you need – please read it before adding any cover to your policy.
How to claim loss of rental income
Notify us of the incident
The first thing you should do – when you’re safely able to – is notify us about the incident.
Documenting the evidence
Tidy record keeping can help speed up the claims process. Throughout the life of a tenancy, it's a good idea to maintain thorough documentation.
At claim time, you’ll need to gather all the relevant details to support your claim, such as:
- photographs of the damage (before and after photos are especially helpful)
- a rental agreement
- any correspondence with the tenant, and
- proof of ongoing payments, like bank statements.
You don’t have to have all your documents ready to start a claim, though it may speed things up. You can add supporting documentation during the claims process.
Lodging your claim
The easiest way to claim for loss of rent on your AAMI Landlord Insurance policy is through the AAMI App or online. Once you've submitted your claim, one of our Claims Consultants will be in touch.
Determination of claim and payout
Once you lodge your claim, we will assess it. If accepted, your Claims Consultant will get in touch to discuss next steps.
What makes an insurance claim likely to be accepted?
Meeting your responsibilities as a landlord
- Maintain the property in good condition, promptly fixing defects, leaks, or wear and tear.
- Ensure that any security devices we asked about, and you have told us are installed are, in fact, installed and in working order.
- Prevent infestations such as termites or vermin.
Providing accurate documentation and evidence
- Entry and exit inspection reports and routine property inspections.
- Proof of ownership and value of claimed items, such as purchase receipts, valuations, or photos.
- Communication records with tenants regarding non-payment of rent, lease agreements, and any legal action taken.
- Police reports in cases of theft, burglary, or malicious damage.
Following the proper claims process
- Make your claim within a reasonable period of the loss or damage occurring.
- Allow AAMI to inspect the damaged building and/or landlord contents.
- Do not admit liability or responsibility to anyone else unless we agree.
Ensuring your policy details are accurate
- Notify us if the insured address is no longer being used as a rental property or if you or your agent becomes aware your tenants start or intend to operate a business activity at the insured address.
- Ensure all information provided to AAMI is accurate and complete, as false or misleading statements can result in claim denial.