Insurance claim lost for loss of rent – Please help

EBM Insurance company Reply:
The documentation supplied establishes the tenant fell into arrears immediately after occupying the property in August 2014. Multiple Termination notices were issued between September 2014 and November 2015. Despite the tenants consistently remaining in arrears and never becoming up to date, termination through the courts was not applied for until March 2016. At this hearing the tenants were given a court ordered payment plan, which advised they needed to make a payment on 31/03/16 otherwise they would need to vacate the property on 01/04/16. This payment was not made and the tenant did not vacate the property. However an application to relist the matter at court was not made until 30/06/16, despite the tenant only making payments sporadically throughout the remainder of the tenancy.

Under the terms of the policy as soon as you are aware of any circumstances that are likely to result in a claim you must take all reasonable precautions to prevent further loss. By not issuing termination notices in a timely manner, not applying for termination through the courts until 2 years after the arrears issue began, and not applying to court to relist the application when the tenant failed to meet the payment plan we have been significantly prejudiced by the failure to mitigate the loss. In this instance the prejudice is so great we have reduced the claim to 6 weeks loss of rent only.

When a section of the policy is exhausted 3 months, or more, is remaining on the cover period, a reinstatement fee of $6.00 per month is charged. In this instance, the 6 weeks retenancy needs to be reinstated for any future claims within this renewal period. As such we have charged a reinstatement fee for the remaining 9 months.

Managing Agent Reply to above insurer comments:
It might be worth appealing but I’m not sure that it will get anywhere. The appeal might even produce a smaller payment.

We did give them a few chances on the back of promises of lump sum payments but the policy documentation is not very clear on that.

Personal view:
In the past tenant has made one bulk payment of around $5000 to cover up the arrears and I thought agent is chasing tennants regularly and we are going to receive the payment but in the end we made a claim for over $8000 and EBM is just paying for 6 weeks.
From the EBM reply, its clearly management agents fault but agent is not acknowledging he has done wrong.
Do we have any solution to minimise the losses in the above case?
Property is located in Adelaide, South Australia