So many times, we have had clients contact us after the fact or said how much something has cost them to fix, but they haven’t taken the appropriate steps first to see what they are able to claim, so the result is they are out of pocket and the insurer will not cover the damage or loss.

Knowing how to handle such situations and properly lodge an insurance claim for building claims and loss of rent is paramount.

If you, at a minimum, follow the proper process, you will be ensuring you are able to lodge a claim and get a full assessment.  We have put together some tips from our own experiences.

Tip 1 – Do not start repairing the property before you have had a proper assessment completed

For an investment property – your property manager should provide you with detailed photos showing you what damage has occurred – if the tenant is still in the property and they have caused damage to the property then they are required to fix it.

If there is e.g. a water leak or a fire then you first need to contact your insurer then and there and lodge a claim and request an assessor inspect the property ASAP – they can co-ordinate this with your property manager very easily.

If your tenant has moved out and they have caused damage or left the property in a poor condition – your property manager will need to complete an outgoing inspection report.

Again, we cannot stress enough here – if you start cleaning the property and repairing the damage how can the insurer see what damage has occurred?

Important to note-

The insurer is going to need the following.

1. Ingoing inspection report from when tenant moved in
2. Routine inspection reports showing how the property was maintained during the tenancy.
3. Outgoing inspection report showing the damage.
4. Any photos and quotes to repair/replace items.

You should get these together and forward to the insurer – do not expect your pm to do this for you, at the end of the day, you own the property, so you need to take control even if it is with the support of your property manager.

Tip 2 – Loss of rent – how does this work?

If you have a tenant that stops paying rent, the loss of rent claim is going to vary from insurer to insurer.

The bond is there to cover any damage and loss of rent – if the loss of rent and damage exceeds this, again that’s when you need to go down the insurance path.

Some Insurers offer different policy provisions with loss of rent including;

• Up to 120 days
• Loss of rent if your property is not able to be relet due to damage.
• Unlimited loss of rent
• Total loss of rent less the bond amount to a maximum amount.

So, very important to cross check your policy and how your insurer assess loss of rent claims. Keep in mind, a loss of rent claim is not normally paid out until a new tenant is secured, as essentially this demonstrates the total loss of rental period.

Tip 3 – Once you lodge your claim – Stay on the claim handler – EMAIL IS KING!

If you are sitting back hoping your property manager who has over 120 properties to manage, is chasing the insurer daily for updates, you will be disappointed – stay on the insurer and ensure you are claiming everything as per policy…

A claim can take weeks and even months – but, if there is extensive damage it’s worth the exercise, hey, that’s why you pay for it?

Tip 4– Water leaks – what does this mean?

Well, this is a very grey point… A water leak from a burst pipe is going to be determined differently to a leak from a membrane in a shower that has simply gave way.

High moisture or bubbling to the walls adjacent to the showers – the first thing I do is ask my pm to get a plumber to do a pressure test on the pipes in the shower as this is going to tell me – is the water leak coming from a membrane that has given way, or coming from a burst pipe that sits in the wall behind the tiles.

We had a client only recently that had a burst water pipe in the kitchen. The water leaked into the lounge and damaged the carpet – so much so they had to replace the carpet, it was soaked through that bad. Lucky for them they had lodged a claim and the assessor got everything they needed from the pm and the owner, so the new carpet in the lounge was covered by the insurer along with the damage to the kitchen cabinets.

Final Thoughts

Navigating the process of filing an insurance claim for rent loss can be intricate, but with careful documentation, clear communication, and patience, you can successfully navigate these challenges.

At the wHeregroup, we stand ready to assist you at every step of the way. Call us anytime to run the questions by us, we are always happy to share our own experiences.

Remember, as an investment property owner, your peace of mind and financial security matter. By understanding the process and following these steps diligently, you can protect your investment and secure your rental income.