My client has suffered a loss (property damage or loss of rent). What is the first step I should take?
First, ask yourself: is the loss even covered? If you don’t know, that is okay – landlord insurance is complex. If you are unsure, the best thing to do is chat with your insurer about the policy and find out if you are able to claim for your client.
Yes, the client is covered and I can claim on their insurance. What’s next?
Most policies have a section that talks about ‘acting to prevent further loss’. That means the policyholder, or you as an agent acting on their behalf, need to take steps to prevent further loss, damage or liability (because no one wants to make matters worse).
When it comes to damage, this may mean you need to arrange emergency repairs or board up a window, secure a door or put a tarpaulin on the roof. EBM RentCover does not need to authorise repairs before they are carried out, however some insurers add this step in. So, just double check you don’t need approval before starting to secure the property.
TIP: Make sure you keep the original tax invoices for emergency repairs to submit with the claim.
When it comes to claiming for rent default (not linked to damage), you need to act quickly and serve the appropriate breach notices. Each state is different and you should familiarise yourself with the appropriate legislation. Failure to do so can have a big impact on landlord insurance and the termination process (if it gets to this stage).
If the property loss or damage is the result of a criminal act – a burglary or malicious damage by the tenant, or civil unrest like a riot, or vehicle impact – you need to report the incident to police and obtain a crime report number for your insurer.
When should the insurer be contacted?
You should notify the insurer ASAP so they can get things under way and ultimately guide you through the claims process. Keep in mind there may be requirements in the policy relating to timeframes for claims, such as making a police report within 24 hours of the loss or notifying the insurer within 48 hours of a loss being reported to police. Just keep this in the back of your mind when tossing up what steps to take first.
In cases where the cost of the damage is likely to be very high, the insurer will typically appoint an assessor who works to identify the value of the loss. The sooner this happens, the sooner the claim can progress.
It is also very important to immediately contact the insurer if there is a chance a liability claim will be made against the landlord (for example, someone is injured on the premises).
TIP: This is an absolute necessity when it comes to professional indemnity insurance too. Your insurer must be advised without delay if there is any chance a claim may be made against you for negligence, wrongdoing or breach of duty of care, as these are typically high-value claims and you will need to be guided through the insurance process.
How do we prove loss?
The policyholder (or you as their agent) needs to be able to show a loss has occurred when submitting an insurance claim. For damage, a great way to support the claim is to snap photos or video before the clean-up. If you’re unable to get access to take photos, you may like to ask repairers to take photos before they start work.
TIP: If you need to dispose of an item because it poses a health risk, such as saturated carpet, keep samples of the damaged material, which you can later submit to the insurer.
Also, it is a great idea to keep an inventory of damaged items with a detailed description, such as brand, model and serial number.
In addition to snapping photos and keeping a record of items, you should provide the insurer with copies of the property inspection reports. This helps the insurer identify the damage which may have occurred during the tenancy period.
For a loss of rent claim, all paperwork you submit to tribunal or the courts during the termination process – such as breach notices and rental ledger – will help provide the detail of the landlord’s losses.
What proof of ownership will be needed?
Sometimes a policyholder will be asked to prove they own the items that have been lost, damaged or stolen. The best proof of ownership is receipts. If receipts are not available, other proof may be accepted such as credit card/bank statements from when the goods were originally purchased, valuations, or photographs of items in the premises.
I’ve been told we need to provide a ‘causation report’, what is this?
This isn’t something to worry about. A causation report is pulled together by the repairer and helps insurers to simply identify the cause of damage and make a quick and fully informed decision when it comes to processing a claim.
The report typically outlines the cause and impact of damage and loss. For example, if the cause of damage is storm/rainwater or hail, the repairer will describe how and why the rain or hail entered the property.
How many quotes do we need to provide?
Generally insurers require two repair quotes for damage claims. However, if the loss occurred as a result of a natural disaster, some insurers may only need one quote (at EBM RentCover, we know natural disasters can cause stress for landlords and property managers, so just one quote is needed to get things quickly under way).
What will I need to submit as part of the claim?
It all depends on the type of policy and the cover the landlord has chosen to protect the investment. Plus, of course, it depends on what you are claiming for.
Typically, here is a list of things you will need to support the claim:
- Completed claim form
- Pics and video of the damage
- One-two quotes of damage repairs
- Tax invoices for emergency damage repairs (in relation to damage caused by natural disasters)
- Causation report (see above if you are not sure what this is)
- Property inspection reports
- A copy of the agreement
Let’s delve deeper into loss of rent claims. For these, you will typically need to provide:
- A completed claim form
- A breakdown of the bond deductions
- A copy of the lease agreement
- The rental ledger to show proof of payment of rent
- The tenant’s original application form for the property
- All breach and termination notices issued
Remember, every insurer has a different process and requires different info. Plus, depending on the reason for claiming, other documents may be required. For example, when the claim is the result of a sole tenant dying, a copy of the death certificate is needed. So, check with your insurer for a concrete list of items to support your claim.
What if I need more help?
At EBM RentCover we work with landlords and their agents to minimise the emotional and financial stress associated with making an insurance claim. While we hope you never run into trouble, if you do, we will be there. If you have a landlord with an EBM RentCover policy and need to make a claim, contact our Expert Care team on 1800 661 662.