We have an insured who suffered loss of rent due to the tenant vacating for non payment.
There is a Tenancy Tribunal order in the insured's favor and the tenant has been lawfully evicted which meets the policy terms and conditions for the loss of rent extension to apply.
The policy sublimit is up to 8 weeks loss of rent. The insured suffered 10 weeks loss of rent. The insurer is wanting to deduct the excess (+ an additional excess of 1 weeks rent) from the policy sublimit.
The wording states:
We’ll first deduct all of the following from your claim:
1. any rent paid in advance
2. any bond held by Tenancy Services
3. an additional excess of one week’s rent.
Is the insurer correct in saying the excesses are deducted from the 8 weeks policy sub limit?
Crossley Gates replies:
Yes. The key to determining this is, what is the excess deducted from? The claim? Or the insured's loss?
Here it says it is deducted from the claim, which is the maximum 8 week limit. If it said 'loss', it would be deducted from the 10 week loss of rent, and if the remaining loss equals or exceeds 8 weeks, the whole 8 weeks is payable.