The following is written from the insurer’s perspective…
The property manager is the agent of the owner and we treat both as the same person. Both Residential Tenancies Acts and insurance law require that the owner/agent take steps to minimise the loss. In part, this means that the owner/agent needs to pursue breaches as fast as the law allows. If they don’t, the amount lost may be deemed to be increased by the irretrievable time lost as a result of not doing it. There is a danger of this lost time not being included in the claim settlement. We allow a reasonable time to issue notices. If an owner wants to give leeway to a defaulting tenant, the owner needs to know that they may be incurring some losses that are unrecoverable from insurance.
Yes. Under our Tenant’s Default section, we cover the owner for lost rent when the tenant obtains a court order cancelling the lease agreement. We treat it as a straightforward default of rent. It is important that the owner/property manager does not agree to the cancellation of the lease. The tenant should apply themselves to the court for relief and the property manager should continue to pursue the tenant for rent arrears until the relief is granted. We will treat the remainder of the lease as claimable in the normal way, provided appropriate measures are taken to re-tenant the property.
Yes. Under our Tenant’s Default section, when a sole tenant dies during a fixed-term or periodic tenancy, we treat the matter as if the tenant had left the premises.
The property manager should take reasonable steps to obtain vacant possession and re-let the property. The property manager is also entitled to seek unpaid rent from the deceased estate up until the date of vacant possession. The only difference between this event and a regular default is that we do not have the right to pursue the deceased estate for the balance of the lease period rent.
DELIBERATE DAMAGE IS WIDER THAN MALICIOUS DAMAGE. The test we apply is that if the intentional actions (not omissions) of a tenant would, if viewed by a reasonable person, be considered to lead to damage, then the damage is deliberate. For more information, please refer to the PDS.
We do not deduct the bond from our claim. However, for tenancy matters, if the bond is not used up on legitimate non-insurance related matters, then the remainder of the bond is entitled to be kept by the owner to cover Deliberate Damage and Tenants Default losses. This means that the amount the owner needs to claim from us is reduced by the remaining amount.
Yes. Under our Tenant’s Default section, the only difference between a periodic lease and a fixed-term lease is the amount of notice each party is required to give to the other. In most states, a periodic lease requires 3 weeks’ notice. In the case of early vacation by the tenant under a periodic tenancy, we will pay the owner the rent they would have been entitled to if the tenant had given proper notice.
No, but they can’t be behind either. If the tenant is up-to-date, that’s good enough. If you are asked about PRIOR history of arrears and other breach of lease behaviour by the tenant, you will have to tell us about this before cover is granted.
We cover accidental damage to fixed glass forming part of Contents as part of our Contents cover.
Some other covers provide an accidental damage cover to other property with a substantial excess. If they treat each item of damage as a separate accident, a separate excess will apply to each item. Therefore the value derived from the cover is not very great. For this reason, we try not to provide what may be seen as a “Claytons” cover.
Under our Deliberate Damage cover, some items treated elsewhere as “accidental damage” will be accepted as Deliberate Damage (see FAQ about Deliberate Damage) and will be paid, totally free of excess (under our standard wording). For more information, please refer to the PDS.
If the money paid back to the owner is wholly or partly for specific amounts that have already been claimed and paid under the insurance, that amount of money must be returned to us. Otherwise, it belongs to the owner.
Refer the tenant to us, we are responsible for maintaining the database entry and can remove it when the debt has been repaid.
Under our Tenant’s Default section, rent loss arising from the failure of a tenant to honour a lease agreement is covered. However, rent for the normal period of unoccupancy which occurs between tenancies and which does not involve breach of a lease is not covered.
To avoid compromising the claim settlement, you should start clean-up and repairs immediately after you get vacant possession. However, if you are insured and are claiming for Deliberate Damage you need to call CRM Brokers immediately and discuss the damage before starting repairs. If we want to collect some information about the damage, we will ask you to hold off repairs until this is done and we will pay for any rent loss arising from the additional delay.
You should also complete the repairs as soon as is reasonably possible. Unnecessary delays caused by working weekends only (for example) and the like may prejudice your rent claim.
To avoid compromising the claim settlement, you should start the process of advertising for a new tenant immediately the premises is fit for viewing. This does not necessarily mean when the repairs are complete. Sometimes, a property can be acceptable to a tenant if they can see that repairs are being done and will be complete when they move in.