GIO Landlord Insurance - No rental default coverage

[DaveM]

Hi all

Just thought I would warn people about GIO's landlord coverage, I have one policy with them at the moment.

They do not cover loss of rent/default if the tenant is not on a fixed term agreement (ie month to month).

Discovered this as the tenants in the property had their fixed term expire a couple of weeks ago and have elected to go to a month by month (which is their right to do so, my preference was for them to re-sign).

Does Terri Scheer cover periodical agreement rental loss? Any recommendations for a replacement insurer as on review, the NRMA policies are similar (though a bit more ambiguous).

 

[kathryn d]

Hi all

Just thought I would warn people about GIO's landlord coverage, I have one policy with them at the moment.

They do not cover loss of rent/default if the tenant is not on a fixed term agreement (ie month to month).

Discovered this as the tenants in the property had their fixed term expire a couple of weeks ago and have elected to go to a month by month (which is their right to do so, my preference was for them to re-sign).

Does Terri Scheer cover periodical agreement rental loss? Any recommendations for a replacement insurer as on review, the NRMA policies are similar (though a bit more ambiguous).

Isn't it also your right as a LL, to keep it on a Fixed Term, with good reason.
It being against policy for your insurance, I would think qualify?

 

[DaveM]

Isn't it also your right as a LL, to keep it on a Fixed Term, with good reason.
It being against policy for your insurance, I would think qualify?

In NSW the options seem to be to sign another fixed term, allow the tenant to go month to month, or terminate. Not aware of any way to force another fixed term unless you threaten to terminate.

 

[The Y-man]

Isn't it also your right as a LL, to keep it on a Fixed Term, with good reason.
It being against policy for your insurance, I would think qualify?

Hi Kathryn,

In Victoria, a tenant is not under any obligaion to re-sign a fixed term lease and the expiry of the current one.

We try to encourage them to re-sign by doing a "discount" on the rent rise - eg $10 per week rent rise at the end of lease if you go month to month, but only $5 per week if you sign a lease etc.

The Y-man

 

[kathryn d]

In NSW the options seem to be to sign another fixed term, allow the tenant to go month to month, or terminate. Not aware of any way to force another fixed term unless you threaten to terminate.

Yep..just read that too.

We don't give most of our tenants that option.
Their lease is terminated if they don't sign another Fixed Term Lease

 

[Propertunity]

Does Terri Scheer cover periodical agreement rental loss?

I think you'll find they also only cover if you have a fixed term lease (not periodic).

Others you could try: CGU, EBM......

 

[DaveM]

I think you'll find they also only cover if you have a fixed term lease (not periodic).

Others you could try: CGU, EBM......

Have spoken with them, they cover periodical leases up to 21 days which is the notice period for the tenant. After that coverage stops unless another insured event is available eg failure to vacate after termination notice issued or a tribunal action is taken.

No pay by the month with TS tho :/

 

[kathryn d]

Hi Kathryn,

In Victoria, a tenant is not under any obligaion to re-sign a fixed term lease and the expiry of the current one.

We try to encourage them to re-sign by doing a "discount" on the rent rise - eg $10 per week rent rise at the end of lease if you go month to month, but only $5 per week if you sign a lease etc.

The Y-man

With the all the regulations against a LL, it really is a wonder anyone even bothers.

...except for the fact they will eventually make us rich.

We live by the motto:
A tenant is only there at our convenience.
When they are no longer convenient, they are gone.


We start most off with a 3 month Fixed term Lease. We have a single mum and her 3 kids in one property. Been there 2 months, and the police have attended on several occassions. They are not being renewed for Feb.
I'd rather have the unit empty, than have the police at our building all the time. It took us forever to rid of the bad reputation when we purchased it in 2005.

 

[jaycee]

In NSW the options seem to be to sign another fixed term, allow the tenant to go month to month, or terminate. Not aware of any way to force another fixed term unless you threaten to terminate.

Same in WA, nothing forcing the tenant to sign a new fixed term lease ocne their lease expires....

And because of this, Rentcover Landlord insurance covers you if a fixed term tenant goes periodic.

I can't see why a reputable insurer would not cover this perfectly legal & very common situation.

But they wont cover you if you tazke on a new tenatn without a fixed term lease.

I can't see why a reputable insurer would not cover.

 

[DaveM]

I can't see why a reputable insurer would not cover this perfectly legal & very common situation.

I asked the same thing, and the customer service guy went to the underwriting dept to get an answer.

Their reply that was due to increasing payouts of rent default under periodic leases, they have removed coverage.

Trying to get a clear answer out of NRMA as well.

 

[Doovalacky]

SGIO is the same must have a rental agreement.
Got around this before by making the tenant sign a monthly or 60 day agreement.

 

[tvadera]

I think you'll find they also only cover if you have a fixed term lease (not periodic).

Others you could try: CGU, EBM......

I am with EBM, would call them and find out whether rent default is covered for month to month lease ( I think it is but would verify)

 

[DEC]

Westpac's PDS says

Loss of rent
If the property is leased at the time of an insured event and the loss or
damage makes the home unliveable and rent payments cease, then we
will cover the lost rent.

Other parts of the document change the terminology to "written rent agreement"

No mention of length of lease or rental agreement, just that there has to be one in place.
I have tenants on a signed periodic now.

 

[SYD]

In NSW the options seem to be to sign another fixed term, allow the tenant to go month to month, or terminate. Not aware of any way to force another fixed term unless you threaten to terminate.

You could issue a termination notice simultaneously with your offer for a new fixed term lease. If they agree to a new fixed term lease you can then cancel the termination notice.

A regular fixed term lease requires the LL to consider an appropriate level of rent. It is also assists with loan applications.

In the meantime you should talk to your insurer about cancelling the loss of rent component of your insurance.

SYD

 

[Ed Barton]

We start most off with a 3 month Fixed term Lease.

perhaps norms are different in Canada but in oz a 3 month term would attract dodgy tenants.

 

[kathryn d]

perhaps norms are different in Canada but in oz a 3 month term would attract dodgy tenants.

We tell them it gives us a chance to see if we like them, and if they like us.
It was the quickest we could evict, as opposed to a month to month lease

Here, in our towns..all the tenants are dodgy.

It is all a matter of degrees of dodginess.

Absolutely not the norm here...we are not the normal landlords.
We know the rules and live by them.
Tenants are starting to know the rules too...or should I say the loopholes

 

[Doovalacky]

In the meantime you should talk to your insurer about cancelling the loss of rent component of your insurance.

Huh? Why would you leave yourself open to losing 4- 8 weeks rent if you have to evict a tenant for non payment?

 

[jaycee]

You could issue a termination notice simultaneously with your offer for a new fixed term lease. If they agree to a new fixed term lease you can then cancel the termination notice.

A regular fixed term lease requires the LL to consider an appropriate level of rent. It is also assists with loan applications.

In the meantime you should talk to your insurer about cancelling the loss of rent component of your insurance.
SYD

Yeah I don't understand what SYD is suggesting, or if I do, why he is suggesting it - loss of rent in my policy worked a treat for me recently !

 

[SYD]

Hi all

Just thought I would warn people about GIO's landlord coverage, I have one policy with them at the moment.

They do not cover loss of rent/default if the tenant is not on a fixed term agreement (ie month to month).

I don't see the point in paying for something when there is no benefit.

SYD

 

[DEC]

I don't see the point in paying for something when there is no benefit.

SYD

In all honesty, its worth looking at the value in any of them.
It takes about 10 weeks to get a tenant out of a property if they stop paying, most insurance companies only pay 10 weeks, but they take the 8 weeks bond as excess .

If the tenant leaves the place looking like a tip, they will claim they have just been untidy, not malicious, so wont pay for that.
Small amounts of damage are apparently wear and tear, broken items apparently only last 18mths in IP's but last 15 years in a PPOR.

If they kick holes in walls or burn it down, they will probably cover you for that so that's something.