We'd might as well save our breath (er typing)
Some people are bound and determined to pay for damages, that they didn't even do.
No. Let me tell you what I would do as the landlord in the circumstances described in the original post.
If the tenant was involved with a fire in his room, regardless of what caused it, and was hospitalised for a week, I would NOT get the PM to lie to him and tell him I have put in an insurance claim (unless I really had done that). I would involve my insurer immediately.
My insurer would do all that is necessary to get the house in a habitable condition ASAP so as to lessen the inconvenience to the tenant, and minimise any liability I might have to pay for alternative housing for him (insurance funded or not). In this case, I believe this person could make some big trouble for the landlord.
My insurer would certainly be interviewing both me and my tenant regarding the circumstances of the damage. If the tenant had any insurance, my insurance company would certainly look at recouping their costs from his policy if at all possible.
That is my take on how insurance works. I know for a fact that the one time we did have an IP claim, the insurer chased the second person on the lease who didn't even cause the damage, but she will be paying for it for a long time.
I would never rely on the tenant having appropriate cover. I like to know I'm covered. Perhaps things are different in Nova Scotia. It seems you do insist your tenants have a certain cover. From the google I did, it doesn't convince me that the tenant would be covered from the initial wording of what a tenant policy covers with a couple of insurers that I clicked on.
Also, in the case of the initial post, the PM and the landlord appear to have lied through their teeth about making a claim.
I am not happy to pay anything that I don't have to, but I like to think I'm a reasonable person, and I would be very concerned if any tenant of mine spent a week in hospital with burns and lung damage and asking them to be discharged from hospital and make the place habitable again themselves would not even enter my head.
And to be honest, none of us know exactly what damage was caused, what needed to be fixed. Insurance premiums rise each year. If I make a claim, sure, it might rise some more, but I would certainly be checking this out thoroughly before just paying it.