There are so many posts here that I could respond to, and I may do so for some, but I have been pretty smashed for time I thought it best to try get something up at least for starters.
Obviously not all policies are the same in what they cover, plus interpretations of various events will also vary between companies, and I hate to say it but because there are always some grey areas with interpretations, they can even vary from one claims person to another. That may not be a perfect scenario but is a simple fact, as so many situations are not cut and dried.
Hypotheticals are also tough as until you (the Insurer) are putting your money on the line you could make out that you would pay anything. There are just too many variables.
The reality is that the ?perfect? policy that simply pays every claim every time without any questions will never exist, as no-one could afford to pay the premiums that would be necessary, or the Insurer would simply go broke.
That said, to the original post:
The area of tenant carelessness is probably the toughest area for a landlord policy to cater for, there needs to be a suitable balance of what can be paid to be fair yet keeping the premium affordable for the majority. Certainly going back to the early days of landlord insurance (20 years ago) the intent was that as the loss of rent would be paid by the policy, in most cases the bond would be freed up to cover general clean up and minor repairs, the bigger problem comes however when these sorts of costs reach extremes, and exceed the bond.
Policies will vary with what they cover, but for example:
Malicious Damage by the tenant - most landlord policies will cover Malicious Damage by the tenant, however "Malicious Damage" generally requires a police report and you have to prove that the tenant did it with "malicious intent", which is often not an easy task. This is a whole subject on its own and because of how restrictive this can be, is the need to have a policy that includes ?accidental damage?, which many don?t.
Deliberate and Intentional Damage ? it helps to break down the technicality of ?malicious? a bit, but still doesn?t go quite far enough, hence the need for ?accidental?.
Accidental Damage ? in a landlord policy this dramatically helps to take away or at least reduce the ?greyness? of how damage occurred. So if a child scribbled on a wall or there are red wine stains after a party, or oil leaked over the carpet when the tenant tried to repair his motor bike in the living room (nothing against motor bikes but the example doesn?t really work with a car), then you can hopefully get it covered under accidental damage.
The biggest problem with accidental damage (apart from the fact that most policies don?t include it) is the definition of an ?event?, as the Insurer may determine that each ?event? is subject to a separate excess rendering a claim useless. To some degree this can happen with our product (RentCover) as well but we have the philosophy of linking a series of events that may tie several together where possible, and therefore one excess only, or a reduced number of excesses. It?s an interpretation thing though so sometimes it won?t be right on first submission and may need some discussion.
So the main question of the post. ?Tenant carelessness, neglect etc.?. Landlord insurance is not really designed to cover this within the parameters of an acceptable premium, but it?s probably more so to do with the ?event? and ?excess? situation I referred to than anything else. The damage that has been caused in extreme examples may be able to be classed as accidental damage and you can get some claimed, but just straight clean up from poor living is always going to be difficult. Why? It is hoped that regular inspections will limit massive amounts of ?clean up?, as hopefully these can be nipped in the bud, whereas ?damage?, whether it be malicious or accidental, are more likely to occur over a short period of time and are less preventable.
Hopefully the bond can be utilised for clean up and the loss of rent and damage can be claimed (which means if you have a policy that has an excess equivalent to 4 weeks rent you are in trouble straight away).
So at the end of the day, what is going to be classed as ?tenant carelessness, neglect, unhygienic living habits or poor housekeeping?, compared to what you might get paid as ?accidental damage?, will more than likely get down to the interpretation of the Insurer (or in our case the broker as we settle most claims on behalf of the Insurer under an authority, which we feel allows us a little more room to understand the whole picture than when dealing direct with the Insurer).
So as I always try to say, no insurance policy is going to be perfect, and trying to match them up feature by feature is fine, but at the end of the day it?s what they (the Insurer) do when it comes time to settle a claim that counts more than anything as so much gets down to the interpretation of what occurred.
I will try to have a look at other specific questions in this thread and answer those directly.
