Insurers halt landlord insurance product sales

Major insurers in Australia have suspended indefinitely the sales of landlord insurance products, citing uncertainties from the coronavirus outbreak.

Landlord policies usually cover rent defaults by tenants, and with the Morrison Government announcing last night the states and territories will put a six-month moratorium on evictions, insurers say they have to adjust their policies accordingly.

Worries that renters might be forced to default are growing as the coronavirus outbreak has led to huge layoffs, especially in the hospitality and retail sectors.

"Allianz has temporarily ceased selling landlord insurance while we put in place a change to remove the optional cover for loss of rent,” a spokesman told insuranceNEWS.com.au today. "This change is being made in light of the move by governments to put in place a six-month moratorium on the eviction of tenants.

"Landlord policies can include a requirement for a landlord to seek to evict a tenant in order to make a claim for loss of rent, which will not be possible during the moratorium.

"As a result, Allianz does not believe loss of rent cover provides sufficient customer value at this time to warrant its continued sale.”

insuranceNEWS.com.au understands the eviction moratorium means landlords planning to make a claim are only required to provide proof of financial loss instead of a tenant eviction notice.

Suncorp and IAG also confirmed their brands have stopped selling landlord insurance until further notice.

"Insurance is intended to provide cover for unforeseen events,” Suncorp EGM Products and Portfolio Darren O’Connell told insuranceNEWS.com.au. "Given the uncertainty around the evolving COVID-19 situation, we were left with no option but to temporarily stop selling new landlord insurance. Our focus is on supporting our existing customers through this difficult time.”

An IAG spokesman says the business stopped selling landlord products across its NRMA, SGIP and SGIC brands last Thursday until further notice.

"This decision does not impact customers with existing landlord policies who can claim for benefits such as loss of rental income if a tenant defaults on payment,” the spokesman told insuranceNEWS.com.au.

See our related article "Emergency Repairs-Tips for Landlords”: https://www.realrenta.com.au/blog/post/123



Marlene Liontis & Jason Gwerder
Friday, 3 April 2020

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