Property damage - tenant pays or Insurance claim?

[kathryn d]

From the above link, which you may have not actually read

f you are a tenant of a rental property where you are responsible to arrange insurance cover for your landlord's fitted carpets, fixtures and fittings under the terms of your rental or lease agreement, you may require this cover. In this situation, we will pay for loss or damage to these items caused by an insured event if you have home contents at the address insured under a policy with us. The most we will pay for each claim is 10 % of the amount your home contents are insured for.

Please read our PDS and your policy schedule for full details.

These are insured events, if they are required in the lease. Again, the correct form of Lease, for the state, territory, province, properly written to require insurance is neccessary, which is the major reason that REI leases as used unaltered by so many, less adventurous(?) less involved landlords, are useless. We thought the point of this forum was to provide information
Lots of respondents write You can't do that, we were not making fun of your sigblock, merely agreeing with it, perhaps you should agree with your sig too

 

[Perp]

I absolutely read it, naturally! I think perhaps you're not distinguishing between contents insurance and building insurance.

The Youi policy refers to those items which would normally be covered by the landlord's contents insurance, eg curtains, carpets, non-fitted whitegoods, etc, not about those items which would normally be covered by building insurance, eg timber floor boards, damage to walls, kitchen cabinets, ovens, etc.

The damage referred to by the OP, where there was a kitchen fire, would - for example - require repairs to the ceiling, kitchen cupboards, cooktop (I'm assuming built-in, as is most common in Australia), all of which falls under the building insurance, not the contents insurance. Yes, if the landlord's curtains were also damaged, the tenant may - if the relevant special condition were in the lease - be able to claim for that, but the vast majority of it would fall under the building insurance.

The Youi policy has this specific exclusion on p27 of the PDS:

What is not Covered?
We will not pay for:
• loss or damage caused to your landlord’s fitted carpets, fixtures and fittings if there is another policy of insurance under which you or your
landlord can claim for the same loss;

Given that nobody is suggesting that tenant's public liability or contents insurance negates the need for the landlord to have any building insurance, and the building insurance would cover the kitchen damage, the kitchen damage would be covered by the landlord's building insurance, and Youi would deny the claim.

And then there's also the general principle - which I got from Kayla at Youi - that contents insurance never pays for non-contents property damage, even under the public liability component. Why? Because it should be covered by a building insurance policy. (That other principle - public liability never covers for events which should be covered by a specific policy.)

Though I have learned something - I didn't know you even could make the tenant responsible for the landlord's contents... interesting...

 

[NBS]

Agreed people do this, but it is not an accident, it would be considered negligence.
Most "accidents" are preventable, and therefore not really accidents.
How you phrase or word your statements, makes all the difference.
It's like the difference of "shall" and "should" in a contract.

Agree with that accident and negligence words I dare say some Insurance Co may use to thier advantage.

Brian

 

[kathryn d]

I was talking to Jesse at Youi, and they said they could never give a definite answer, because all claims were on a case by case basis..which doesn't mean they are not covered.
I specifically asked about this case senario, and she couldn't tell me it wouldn't be covered.This is when a tenant is required to have tenant liability cover, when it specifically is required in their rental lease contract.

I have certainly read and understand what the difference between contents and building insurance.
Pedro61 had not required tenant insurance. If he should in court it was available, the outcome might be different.The fact he didn't require it, means his insurance will cover it.Which means he now has a claim against him.

The requirement for tenant liability insurance will put the responsibility back on the tenant, and their insurance, where it belongs.

Most importantly, a properly worded, to the statutes of the applicable state, province, terriority legislation, lease agreement detailing the tenant responsibility for liability insurance, thus making all these occurances an "insurable event", under the terms of the insurance policy.

Preconceptions that the lease format offered by your PM is the best one,or has even been thought about, costs LLs very much money.

We drafted our leases, and had them approved by our RTA.
You could do the same, or have one prepared by a competant property solictor, to protect your interest, and not the PM's interest, which never aligns with the LL.
It's in the PMs interest to replace tenants on a continuance basis for reletting fees etc.
The LL just wants a tenant who pays rent and doesn't do damage.


PMs....
Do their agencies permit a LL to use a custom lease?

 

[Perp]

I have certainly read and understand what the difference between contents and building insurance.

Then why do you keep insisting that a contents policy - which is what the tenant insurance is - will cover building damage?

 

[kathryn d]

Then why do you keep insisting that a contents policy - which is what the tenant insurance is - will cover building damage?

Because it states in this insurance companies policy disclosure that this is an insured event if certain conditions are met.

 

[Amadio]

Because it states in this insurance companies policy disclosure that this is an insured event if certain conditions are met.

Not mine. I have renter's insurance called Home & Contents Insurance with Suncorp.

The detailed PDS in section called "What is not covered under any part of your policy" is 8 pages long.

The very first statement is -
"We do not cover loss or damage:
Anything you don't own."

I interpret that to mean the building or any appliance owned by the LL.

 

[kathryn d]

Not mine. I have renter's insurance called Home & Contents Insurance with Suncorp.

The detailed PDS in section called "What is not covered under any part of your policy" is 8 pages long.

The very first statement is -
"We do not cover loss or damage:
Anything you don't own."

I interpret that to mean the building or any appliance owned by the LL.

Does your lease require you to have Tenant Liability insurnace?
If not, you probably have nothing to worry about...yet.

At the moment perp and I are discussing, when a lease is properly written,to require proper insurance.

Perp seems to be of the opinion, leases used by most incompetant PMs using no restrictions are of value.

We are of the opinion that a properly worded lease can solve a lot of your problems.

 

[Amadio]

Does your lease require you to have Tenant Liability insurnace?
If not, you probably have nothing to worry about...yet.

At the moment perp and I are discussing, when a lease is properly written,to require proper insurance.

Perp seems to be of the opinion, leases used by most incompetant PMs using no restrictions are of value.

We are of the opinion that a properly worded lease can solve a lot of your problems.

Sorry to interrupt the cocktail party.

I thought you were discussing whether the only available insurance for tenants covers the kinds of events that the OP raised. i.e. his building.

It doesn't seem to matter what requirement is written into the lease - if there is no insurance that a tenant can take out to cover a LL building, what's the point?

 

[AlmostBob]

Amadio(gday): My car is blue, does not mean all cars are blue, the contents of your insurance policy may not make an iota of difference to other insurance policies, or to the availability of insurance in general

There is a bias, to continue as have always done, whether or not that which is done is done the best way.
The first employers who tried to insure the life of the employee upon whom their business depends
The first husbands who insured their stay-at-home wives, irreplaceable mothers, were likely also derided
now those things are commonplace

PMs work for the benefit of the property management company's shareholders, not for the benefit of the landlord or the tenant.
The RTA decisions[sup](1)[/sup] in Australia show no bias, except against the one who made the most mistakes in their application or reply.
Draft the lease exactly to law, to include clauses for the protection of the property, and its done

We are retired, on permanent holiday, 8 months in Aus for summer, 4 months in Canada for summer. on extremely CF++++ residential rental properties in our portfolio.
We have four employees doing the daily work under direction.
We began our investments six years ago at zero
We seem to be doing something right.

Think outside what was previously the norm, do what is best for you (your business etc), within the dictates of law.
YouI already offer tenant insurance as it exists in the rest of the world, including a large liability component, insurance companies are nothing if not bandwagon-jumpers, when they ( the insurers ) discover a whole new income stream .......

The importance of a properly written lease cannot be strongly enough emphasised.
The liability of the standard REI lease cannot either be strongly enough emphasised

My opininion, a person not intimately involved in running their property, is no more an investor than a person with company superannuation is invested in BHP

1* available to be read online

 

[Perp]

Perp seems to be of the opinion, leases used by most incompetant PMs using no restrictions are of value.

How on Earth did you get that from this discussion? I use a bunch of special conditions myself.

 

[kathryn d]

How on Earth did you get that from this discussion? I use a bunch of special conditions myself.

That is really good to hear.

Will you be considering adding that tenants provide tenant insurance?

 

[Token Funder]

I was talking to Jesse at Youi, and they said they could never give a definite answer, because all claims were on a case by case basis..which doesn't mean they are not covered.
I specifically asked about this case senario, and she couldn't tell me it wouldn't be covered.This is when a tenant is required to have tenant liability cover, when it specifically is required in their rental lease contract.

*snip*

Good 'ol Jesse should be able to give you an answer but hasn't because she doesn't know.She should give their PDS a read.

Couple of obvious points.

You can't insure property in which you have no pecuniary interest. I can't insure your house and then claim if it burns down. Equally, as a tenant I can't insure the house I'm in if it is owned by you.

As a pretty standard wording, liability covers under contents policies specifically exclude any liability for property in your possession/under your legal control. So should the tenant accidentally burn down your rental property, feel free to sue. But do so knowing that their liability cover won't come to the party.

 

[kathryn d]

Everyone seems to be willing to close their eyes to the facts, that even the insurance company is telling you.They will cover Fires etc, under certain conditions.

You all seem to read one part..and ignore the rest.
Good luck.

 

[kathryn d]

Today I called an insurance company.
The first company telephone staff didn't have the option to provide this cover.
Most, I guess, would have stopped there.

If I had the type of personality to stop there, I wouldn't have discovered Youi did offer this insurance to tenants.

I called and asked for information.
I informed them I was a LL, and wanted to know if insurance was available for a tenant.Their website stated it did, under certain circumstances.
I was transferred to a more knowledgable contact.

What I did find out, is for the tenant it had to be accidental.
As a LL, we would consider the tenant to be negligent.
Either way, the LL still gets the desired effect.

 

[kathryn d]

http://www.acat.act.gov.au/decision...32&PHPSESSID=7e9356bff21d6a80d40ff5169de1018e

I have been reading tenancy decisions and came across this one. It seems to be quite relevant to this thread.
A tenant had a kitchen fire, similar to Pedro's.This tenant willingly released the bond of $1400. After the tenant left, the LL went to the tribunal to request an additional $1800 in damage of the remainder of the property.
Guess what,..the LL wins.

I have read a few other cases, and for the most part they seem to be quite fair decisions.Some LLs actly badly and deserved to lose.
It seems with proper documentation, photos, completed entrance and exit inspections, and full compliance with the terms of the Act, the LL does get a fair hearing.
We look forward to attending some in court soon as a spectator.

 

[kathryn d]

Pedro61,
http://www.acat.act.gov.au/decision...95&PHPSESSID=7e9356bff21d6a80d40ff5169de1018e

I have also posted this link in another thread, but thought you and hopefully others will find this ACT decison helpful and inspiring.

 

[zepth]

http://www.acat.act.gov.au/decision...32&PHPSESSID=7e9356bff21d6a80d40ff5169de1018e

I have been reading tenancy decisions and came across this one. It seems to be quite relevant to this thread.
A tenant had a kitchen fire, similar to Pedro's.This tenant willingly released the bond of $1400. After the tenant left, the LL went to the tribunal to request an additional $1800 in damage of the remainder of the property.
Guess what,..the LL wins.

I have read a few other cases, and for the most part they seem to be quite fair decisions.Some LLs actly badly and deserved to lose.
It seems with proper documentation, photos, completed entrance and exit inspections, and full compliance with the terms of the Act, the LL does get a fair hearing.
We look forward to attending some in court soon as a spectator.

To be fair the ruling was not made based on the fire damage but based on the condition of the rest of the property that was damage in no way related to the fire.

'The lessors make no claim in relation to the damage caused to the premises by the fire in the kitchen. Ms Mortimer in her written application stated that the tenant returned the premises in a condition not consistent with fire damage'

For the second decision the ruling was based on the fact that while the landlord was insured, their particular insurance did not cover the damage encountered, so it seems that if the landlord did have insurance that covered the damage that the decision may well have gone differently. This was also a case where the fire was never reported and there was evidence of other malicious damage as opposed to an accident so we aren't exactly comparing apples with apples.

 

[kathryn d]

http://www.acat.act.gov.au/decision...95&PHPSESSID=7e9356bff21d6a80d40ff5169de1018e

I direct you to points 18,19, 20


Zepth,
In the previous link..
The landlord, tenant, judicator have all accept that The bond was applied to fire damage, thus accepting the tenant responsibility for the fire adamage. If the adjucator had not accepted the tenant responsibility for the fire damage, the adjudacator would order the disposal of the bond in payment of part of the $1800 claim the LL would only receive the difference between the bond and the claimed amount.
This is what you would in any subsequent hearing.
The adjudacator has the authority to order the dispersment of the bond as they fit, wiothin the bounds of law, regardless of how the LL has already dispersed the money. If in the adjudacator's opinion, it is not proper to do so., the adjudator upheld the liability of tenant for the fire damage.

 

[Token Funder]

http://www.acat.act.gov.au/decision...95&PHPSESSID=7e9356bff21d6a80d40ff5169de1018e

I direct you to points 18,19, 20


Zepth,
In the previous link..
The landlord, tenant, judicator have all accept that The bond was applied to fire damage, thus accepting the tenant responsibility for the fire adamage. If the adjucator had not accepted the tenant responsibility for the fire damage, the adjudacator would order the disposal of the bond in payment of part of the $1800 claim the LL would only receive the difference between the bond and the claimed amount.
This is what you would in any subsequent hearing.
The adjudacator has the authority to order the dispersment of the bond as they fit, wiothin the bounds of law, regardless of how the LL has already dispersed the money. If in the adjudacator's opinion, it is not proper to do so., the adjudator upheld the liability of tenant for the fire damage.

...which has nothing to do with the question as to whether a tenant who accidentally causes a fire in your kitchen can resort to their own insurance to cover said damage.

As I said previously, there is a big difference between whether a tenant is legally liable for said damage and whether they can obtain insurance for it.

As I am sure your insurance friend has told you, the liability cover under the tenant's contents cover won't come to the party and they can't insure the building itself.