Special conditions to loss of rent claims
It is important to note that Tower Insurance Limited would not pay more than the landlord would legally be entitled to had the tenant complied with their lease agreement, nor would they pay more than what could legally be recovered from the tenant.
Calculation of the loss of rent benefit
Loss of rent will start from the day after the tenant’s last paid rent e.g. if the tenant is paid up to and including 10 May the claim will begin from 11 May. The loss of rent will be calculated until whichever of the following events occurs first:
a. The day before the property is re-let
b. The expiry of the lease agreement
c. The date the landlord withdraws the property from the rental market
d. The date from which the tenant vacated if no effort is made to replace the tenant
e. The maximum amount claimable is reached
Bond disbursement is at the full discretion of the Property Manager. As this policy does not pay for re-letting expenses, the bond may be utilised to cover those costs. You are not required to provide evidence of bond receipts, re-letting expenses or property condition reports for loss of rent claims.
If the conditions of the rental market dictate that an excessive vacancy period will be sustained between tenancies the policy will not respond to that loss. This is a financial risk inherent with owning a rental property.
Periodical lease agreements
For the purpose of calculating a loss of rent claim, consideration will be given to the limited obligations upon the tenant in a periodic lease situation. The benefit payable commences from the day after the tenant last paid rent up to the date vacancy is apparent and then the notice period of 21 days.
When cover is not placed at the beginning of the tenancy the following condition applies:
If at any time during the two calendar months prior to cover being requested, the tenants rental payments were in arrears for 10 days or more, excluding statutory holidays, then we will only provide cover under Section 2 Contents (excluding intentional damage) and Section 4 Legal Liability of this policy until such time as the tenant has maintained rental payments for two consecutive months without again falling into arrears of more than 10 days at any time.
All loss of rent claims are subject to an excess. Excess is 50% of one weeks rent or $250 whichever is the higher. The insurer will pay loss of rent from day eight of rent loss.