Home / Local / Real estate industry seeks 'clarity' on landlord cover
20 April 2020
More insurers and brokers have stopped offering rent default cover in new residential landlord policies or reduced the scope of coverage for renewals in response to the coronavirus outbreak, prompting a request for “clarity” from the real estate industry.
The Real Estate Institute of Australia (REIA) has approached the Insurance Council of Australia (ICA), which is “considering the matters raised,” according to REIA President Adrian Kelly.
ICA has confirmed it has heard from the REIA.
Mr Kelly told insuranceNEWS.com.au his industry needs “clarity on some issues raised by industry regarding the provisions of landlord insurance policies and their application in the current circumstances.”
“ICA is considering the matters raised and will be providing some guidance to the real estate sector shortly,” he said.
The changes to residential landlord products come amid worries that the virus-induced economic slump could force renters who have lost their jobs to default, prompting a wave of claims from policyholders.
A spokesman for Commonwealth Bank-owned CommInsure told insuranceNEWS.com.au the business no longer provides cover for rent default in new policies.
A spokesman for ANZ says the lender's residential Landlord Insurance product, which is issued by QBE, is available to existing bank customers who already have covers in place. It is also available to any customers that draw down new investor lending with the bank.
WA broker EBM says the business has “taken the difficult decision” to stop accepting new clients for its RentCover product. A spokesman told insuranceNEWS.com.au the move will allow the business to focus on its existing clients, and appropriately respond to significant changes to tenancy legislation around the country, at a time of increased uncertainty as a result of COVID-19.
“We are working very closely with our underwriters and with our agent partners and individual clients during a challenging time, making sure that we have the proper resources available to continue working effectively and to the highest possible standards,” the spokesman said.
“While we aren’t taking on new business at this time, we are responding to queries and providing advice on how to best manage rental properties. We look forward to expanding our service reach as soon as conditions permit.”
Hollard has suspended the sale of Tenant Default cover and reduced the coverage for existing customers who want to renew their policies.
“These actions have been taken in response to changing economic conditions which have fundamentally altered the risks associated with the product,” a Hollard spokesman told insuranceNEWS.com.au.
“This will also enable us, as far as possible, to continue to offer Tenant Default to existing customers at affordable premiums despite the inevitable financial losses we will incur on this product.”
Allianz says it has temporarily ceased offering rent default cover for new business while that element of its landlords policy is reviewed.