Landlord Insurance Claim Refused? Letter of Demand (Australia)

You did everything right. You used a property manager. You had landlord insurance. The tenants stopped paying rent, or they trashed the place, or they vacated without notice and left thousands in damage. You lodged the claim, expecting that’s exactly what the policy was for. Instead: “We’ve reviewed and your claim falls outside cover,” or, “You didn’t take reasonable steps to mitigate,” or, “The condition reports don’t support your claim.”

Landlord insurance disputes are common and consistently winnable when properly framed.

The legal framework

Landlord insurance is governed by the Insurance Contracts Act 1984 (Cth) and the General Insurance Code of Practice. Underlying tenancy law is state-based: New South Wales Residential Tenancies Act 2010, Victoria Residential Tenancies Act 1997, Queensland Residential Tenancies and Rooming Accommodation Act 2008, etc. Bond claims and tribunal orders (NCAT, VCAT, QCAT, RTBA) are key evidence.

Common denial reasons and how they fail

• “You didn’t take reasonable steps to recover from the tenant.” If you have a tribunal order, the bond was claimed, and the tenant disappeared, you’ve done what’s reasonable.
• “Damage is wear and tear.” Entry condition report vs exit condition report (with photos) is the test. Wear and tear has a specific meaning at tenancy law.
• “You didn’t notify on time.” Section 54 of the ICA limits this defence unless prejudice is shown.
• “Loss of rent claim — tenant stayed too long without paying.” Most policies cap loss-of-rent cover; check the cap rather than accepting a full denial.
• “Pet damage excluded.” Only if the pet was unauthorised AND the policy explicitly excludes — and only for pet-attributable damage.

What the document does

A Letter of Demand sets out the policy, the claim, the precise denial reason, the legal or factual flaw, the sum claimed (with breakdown), and a deadline. It also requests the insurer’s expert reports, scope assessment, and file notes under the Code. It puts them on AFCA notice.

What Claim Done delivers

Ten-minute wizard. Tell us about the policy, the entry/exit condition reports, the tribunal/bond paperwork, and the denial letter. Our Programmatic Algorithms draft your formal complaint to the insurer and your AFCA complaint citing the right ICA sections, Code clauses, and the relevant state tenancy statute. Flat $97 fee, draft ready in about five minutes for you to read and approve.

What to expect after sending

Most landlord insurers respond within 21–30 days, often with a partial settlement. If denied again, lodge with AFCA — free, binding, and AFCA has detailed published positions on most landlord-insurance dispute scenarios. If you also need to chase the tenant directly via tribunal, that’s a parallel tribunal application.