Aon, the leading global provider of risk management services, insurance and reinsurance brokerage, and human resources solutions and outsourcing, announced that it has partnered with QBE Insurance Group, one of the top 25 insurers worldwide, to offer Aon Rent Protect, a new insurance product designed to reimburse landlords for lost income when tenants default on rent payments.
Traditional property and casualty insurance plans provide coverage for lost rent due to physical damage exposures such as fire or hurricane, but do not address the risk of tenant default.
“Rent default coverage has been sold overseas for years, but has not been available in the U.S. until now,” said Kevin Madden, managing director of the Real Estate practice at Aon Risk Solutions. “We are excited to offer this crucial management solution to residential and multifamily property owners and managers.”
“This is a game changer for anyone who owns or manages a residential rental property,” added Kevin Morman, senior vice president of program design and development at Aon Affinity. “When tenants default on the rent, it can take months for landlords to regain their property and seek out another tenant. Meanwhile, landlords must continue paying mortgage and additional expenses. Aon Rent Protect helps relieve this cash flow nightmare.”
Aon and QBE have tailored the product to address all sectors of the residential rental property market:
Individual Property Owners
• Aon Rent Protect provides rental income replacement for up to six months and assistance with legal expenses such as attorney fees to help with the eviction process
• Annual premiums start at $250 per rental unit
• Referral program is available for property management companies with landlord clients that would benefit from the new product
• Available in California, Colorado, D.C. and Pennsylvania effective November 1, 2011; soon to be available across the U.S.
Large Property Investment Firms
• Aon Rent Protect helps manage financial balance sheet risks by allowing the firm to cap total liability, ensuring rent default losses do not exceed the amount selected. Available now across the U.S.
“No offering in the U.S. market currently provides adequate protection for landlords against tenants defaulting on their rents,” said East Coast Regional Vice President Joel Laventure at QBE the Americas. “This product will offer peace of mind to landlords, who are heavily reliant on consistent rent payments from their tenants to maintain their investment.”
Aon Risk Solutions, the global risk management business of Aon, provides Aon Rent Protect to large property investment firms, while Aon Affinity, the product sales, marketing and distribution business of Aon, will offer Aon Rent Protect to individual property owners.
Aon and QBE have provided tenant rent default insurance in Australia, the UK and New Zealand for the past 20 years.