CONTRIBUTORSElite AgentEPM: Best Practice & LegislationOPINION

Insurance claims: What’s the hold up?

When things go pear-shaped at a rental, you want to get it sorted quickly. But while there are steps you can take to make the claims process easier, there are factors at play beyond the control of you or the landlord’s insurer that could see those claims held up.

When a rental is damaged, you and your client want it repaired as quickly as possible. And the insurer does too.

Like you, the insurer knows that the sooner the rental is repaired, the better. It reduces the risk of further consequential damage occurring, enables the property to generate income again and generally reduces the amount of a claim – delays can result in cost blow-outs.

This means insurers aim to settle claims as quickly as possible.

Despite the best of intentions, however, those plans can be derailed. And lately, there have been factors beyond anyone’s control that are causing delays and disruptions to all kinds of regular business activity, including settling insurance claims.

Like many industries, insurance is being affected by Australia’s historically low unemployment rate, the impact of the COVID-19 pandemic and some big insurance events thanks to Mother Nature.

As a result, there might be fewer loss adjusters or experienced claims specialists dealing with an unusually high number of claims.

Building and trades have felt the labour shortages even more acutely. Trying to get someone with a toolbelt onsite can feel a bit like mission impossible these days.

What this means is that it’s hard for insurers to secure the services of a loss adjuster or a builder/tradie to assess the cause of a damage claim and provide a cost to repair that damage.

Without the input of these professionals, it’s difficult to settle a claim. The issue with a lack of trades also means it’s taking much longer to have repairs made.

The repair issue has been compounded by a shortage of building materials. COVID-19 and other global events such as the war in Ukraine, have resulted in global supply chain disruptions, making both raw and finished materials harder to get quickly or get at all, and more expensive.

Locally, border closures during Covid and the flooding of transport routes have also had impacts which are lingering. This has meant that repairs are being delayed as the materials needed aren’t available.

In some cases, it isn’t only building materials that are in short supply but other goods too, so replacing lost contents, and particularly those coming from overseas, may also take longer.

Already constrained labour and material supply issues have been further impacted by the recent spate of extreme weather events.

When large-scale events like the east coast floods occur, there is a greatly increased demand for insurance and building services.

This makes it even harder to get access to a loss adjuster or trades, leading to longer repair and replacement times.

It isn’t just those caught up in the weather event that are impacted. When the Insurance Council of Australia declares a catastrophe, insurers are obligated to prioritise those claims, often unavoidably pushing out the settlement times for other non-catastrophe event claims.

Although insurance claims may be taking longer to settle now thanks to local and global events, there are things you can do to help speed up the process – starting with understanding your client’s landlord insurance policy and what you’ll need to submit for the claim.

When things don’t go to plan at the rental and your landlord client needs to make an insurance claim, here are our top tips to help streamline the process:

  1. Contact the landlord’s insurer as soon as you are aware that a claim might need to be made.

    The insurance provider will be able to provide guidance on the process – they’ll let you know if the claim is likely to be covered by the policy (you might be surprised how often claims are submitted for things that simply aren’t insured events) and what you will need to supply to support the claim.

    They can also let you know of any excess payable and other matters that might influence whether a claim is made or not.

  2. Understand the insured’s obligations, such as the need to act to prevent further loss.

    This means you might need to do things like have a tarp put up to cover a damaged roof, board up a damaged window or door, move undamaged items out of harm’s way or arrange for emergency repairs.

  3. Gather the evidence. It’s the responsibility of the policyholder to prove that a loss has occurred.

    This means they need to provide evidence that they have suffered a financial loss that is the result of an insured event.

    Document any damage using photos and video, make a list of damaged items, and make sure that damaged items are not disposed of unless they pose a health risk (e.g. soaked carpets). Even in that situation, keep a sample or other evidence to show the claims assessor.

  4. Pull together the paperwork. You’ll need to submit a number of documents to support the claim, depending on the type of loss.

    For example, a causation report, receipts for emergency work, quotes for repairs, rental ledger, or inspection reports. The insurer will advise what is needed.

  5. Submit the claim including all the supporting documentation. If the paperwork isn’t provided when the claim is first lodged, you’ll be asked for it later on – and that only extends the process. 

Ultimately, having what’s required on hand will make the process quicker – and the quicker the insurer can assess the claim, the quicker it can be settled.     

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Sharon Fox-Slater

Sharon Fox-Slater is the Managing Director of EBM RentCover, which protects more than 165,000 rental properties across Australia. For more info, visit RentCover.com.au.

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