How a Landlords Insurance Policy saved this client $80,000+

Landlords Insurance Case Study

If you are one of the 1.86 million Australians who own residential property investments, you may already know that Landlords insurance is essential (and also a tax deduction) but you probably don’t know just how important it can be.

Earlier this year, one of our valued clients found this out the hard way.

They had multiple insurances through Allsafe and their investment properties were covered by  CGU CQIB Residential Landlords insurance.

Just days before Christmas, tenants trashed their rental property and left the residence without informing the Property Manager and/ or the Insured.

The insured was made aware of these events early in 2020 and contacted their Allsafe broker Todd Ferguson.

Todd helped them to lodge the claim with CGU Insurance who immediately placed an external Loss Adjuster on the claim. Loss Adjusters are often employed by insurers to help them handle claims where the losses exceed $50,000 and in this instance, the total claim amount was estimated at more than $84,000.

The house was effectively destroyed and the tenants had left behind something in the vicinity of six skip bins worth of trash and rubbish.

“They left the property in an utterly appalling state despite passing a routine property inspection just weeks earlier,” Allsafe Broker Todd Ferguson said.

The incident was classified as a RENT DEFAULT & MALICIOUS DAMAGE claim and after the first visit from the Loss Adjuster, a CGU approved “Panel Builder” was engaged to start the process of quoting the repairs and cleaning of the house.

However, the claim hit a snag half-way through the first report, with the original Loss Adjuster leaving and passing the file to a new Adjuster who re-started the process. By mid-May, despite several attempts to keep things moving, the claim was going nowhere. Todd reached out to directly to CGU, outlined the problems with the case and was put in touch with a dedicated Claims Consultant.

“Between myself, the insured and the Builder, Mark from CGU was able to start the claim from scratch again and outline the insured events that would be covered, determine how many excesses would be applicable and what matters might be considered outside the realm of insurance i.e. poor housekeeping by the tenants etc,” Todd said.

“For the next few months, we worked closely together on this claim, on pretty much a weekly basis. By mid-June CGU had arranged for the home to be cleared of rubbish and for the electricity to be switched back on so repair works could begin.”

Todd said the scope of works changed several times as more and more damage was uncovered but by mid-June, he had negotiated with CGU to make their first cash payment to his clients for rent default and additional costs incurred by claim delays.

By the end of July CGU made another $10k payment covering all the damaged fixtures and fittings in the home (an automatic benefit under the CGU CQIB Landlords policy).

By the end of August, the remaining cash settlement of $65k  had been finalised.

The claim took eight months to finalise and more than 388 pieces of correspondence.

Todd said it was a long and difficult process but praised the work of Mark from CGU who helped turn the claim around and get the client back on their feet.

“From the first moment Mark picked up the pieces of this claim following my escalation of the issues, his service was absolutely exceptional.  He managed to thoroughly pick apart and then put back together, what was a very messy and complex matter.”

“The fact that everything was effectively said and done within 4 months since Mark T took over, unfortunately, means that the first 4 months of the claim was essentially wasted time, which was disappointing.

“Unfortunately, the process isn’t always a smooth as we’d like it to be and coming off our worst summer on record for insured Catastrophe losses, I well knew the insurer Claims Departments and Loss Adjusters alike were being worked to the bone. Add to that the COVID19 lockdowns, we had a perfect storm of events occurring that conspired to drag this claim out longer than was necessary.”

The perfect storm might not happen to you, but Todd’s client was certainly happy they had Todd and insurance on their side to mitigate the “bad weather”.

“A MASSIVE THANK YOU! We really appreciate your efforts on this one. Super glad to put it behind us. P.S you’re the best,” the client wrote.

 

SOURCE: ABS – LATEST ISSUE 4130.0 – Housing Occupancy and Costs, 2017-18 Released at 11:30 AM (CANBERRA TIME) 17/07/2019

 

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