A leading homeowner insurer has confirmed that it will not cover any reduction in rents negotiated by the owner and the tenant in the midst of the COVID-19 outbreak.
In addition, Terri Scheer confirmed that they will not accept more new customers during the pandemic.
"Given the uncertainty surrounding the situation of COVID-19, we have temporarily stopped selling new homeowners insurance. Our goal is to support our existing customers during this difficult time, "said Carolyn Parrella, Executive Director of Insurance at Terri Sheer.
She also stated that insurers do not consider rent reductions to be a default by a tenant.
"Landlords who choose to negotiate lower rents with tenants will remain covered by their current policy until the new rent amount. So if a tenant stops paying rent at the renegotiated amount and leaves the property, there may be a valid trigger for a claim, "she told Your Investment Property.
State governments have put in place several policies in response to the pandemic, including a ban on evictions and financial arrangements to help tenants keep a roof over their heads. Homeowners were also encouraged to negotiate with their tenants for any deferral or reduction in rent.
Parrella said that while the eviction moratorium was in effect, any unpaid rent would continue to accrue until the tenant vacated the property. In such cases, the owner can file a claim.
"We will not require property managers to issue an eviction notice during the moratorium period for a subsequent claim to be valid, but this is limited to the moratorium period", did she say.
Campbell Fuller, head of communications and media relations at the Insurance Council of Australia, said that tenants who were struggling to pay their rents could seek government help.
"Governments expect tenants to continue paying rent when they have funds, especially when they receive taxpayer-funded assistance, such as JobKeeper, JobSeeker or rent assistance, "he told Insurance Business Australia.
Fuller stated that in cases where tenants are unable to meet their obligations, insurers will not sue them for unpaid rent. However, he said that landlords should know that not all policies cover loss of rent.
"Homeowner insurance protects an owner's investment in a rental property. Coverage can be purchased for the building, rental content or rental income, or any combination of these Coverage for loss of rent is not always included in a landlord policy and can be added as needed, "he said.
Main suburbs:
belmont
,
emerald
,
chermside
,
west wodonga
,
Hebersham
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