Landlord Insurance and Negligent Tenants...

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sxz

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#1612063 15-Aug-2016 16:55

Wheelbarrow01:

networkn:

I am gobsmacked. What reasoning exists for making it the Landlords responsibility?

I am not sure, but if you provide enough notice, are you able to ask a tenant to leave for any reason?

Who knows what their reasoning is, but it pushes the responsibility squarely onto the landlord, which is unfair in my opinion. So if a tenant has a massive party the day before they vacate the property and the house is trashed in the process, the tenant can just say "sorry, it was an accident" and the cost of repair is shifted to the landlord and/or their insurer. there is no onus on the tenant to make good.

The law was introduced after some tenants in Dunedin accidentally burnt down the house, the landlord was paid out by the insurer, then the insurer sued the tenants. The government introduced legislation to say in that instance the Insurer/Landlord can't sue the tenant if they can recover via insurance.

Here is the link to the actual court decision, rather than just the stuff article.

The law introduced by the government provides that the Landlord cant recover losses from the tenant if the premises: "are destroyed or damaged by 1 or more of the following events: (a) fire, flood, explosion, lightning, storm, earthquake, or volcanic activity: (b) the occurrence of any other peril against the risk of which the lessor is insured or has covenanted with the lessee to be insured." There are of course exceptions, like if the damage was intentional (then there is no protection). Trashing a house is arguably intentional.

The government's intention seems clear - to cover the big stuff. Insurance companies appear to have interpreted it to cover the smaller stuff too - like damage to your friend's garage.

networkn

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#1612070 15-Aug-2016 17:09

dclegg:

Wheelbarrow01:

[But that is the crux of the issue - although not the same scenario, the principle is the same as the case that went all the way to the Court of Appeal. That judge ruled that where a landlord has insurance that would otherwise cover the damage, the tenant cannot be found liable (unless the damage was intentional) and the landlord should be compelled to claim against their own insurance, and payment of the excess is just the cost of being in the business of renting properties.

We had the reverse happen recently.

We were temporarily renting, from February to June this year. Within a week of being in the house, we mistakenly put tinfoil on the bottom of the oven. It's a thing we've always done with ovens, but didn't know it was a no-go with modern ones (the oven was approximately 6 months old). It baked onto the enamel, and couldn't be removed.

The oven could not be repaired (don't go there; seperate rant), so had to be replaced. Our landlord got in contact with her insurer (Youi) to claim, but they used numerous excuses to get out of paying.

First they claimed she hadn't informed them she was renting the property (she had). Then they tried to say it wasn't covered by her insurance because it was considered damage to contents (even though she had both house and contents insurance with them).

I can't recall the exact wording for their reason to finally refuse the claim, but I remember it was some nonsense about it being an oven, and the damage being caused by heat.

We got in touch with our insurer (AA Insurance), who paid the claim with no fuss.

Youi are being investigated for exceptionally bad business practices, and I expect based on the bit of reading I did, they are about to go down big.

I liked the recently reply to those horrible youi ad's by a competing firm who talk about "we ASSUME you want".

The whole youi thing was sketchy when I got my quote.

UHD

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#1612125 15-Aug-2016 19:10

For ages now the properties that I rent have an insurance excess cost built into the annual rental I demand. They are all on 365 day agreements so each year I am able to claim insurance once as part of the sum I ask from the renters.

Rather than waste my time and that of my tenants I am happy for them to pay in case I need to claim insurance.

alasta

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#1612171 15-Aug-2016 19:45

So, as a tenant it sounds like I'm potentially paying for personal liability insurance, and then also paying a premium on my rent because of the risk that my insurer might push the liability back onto my landlord if something happens.

I would rather just have all the liability on my own insurer to avoid duplicating this cost.

sir1963

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#1612186 15-Aug-2016 20:26

linw:

Wow, it's totally unfair to move the excess to the landlord. Where the hell are we heading?

And wait for the squeals if rents have to go up to cover this.

Is it legal to make tenants/renters insurance a requirement of the agreement.

After all, the banks make insurance a requirement of a mortgage .

Brumfondl

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#1612187 15-Aug-2016 20:38

KrazyKid:

The tenants insurer is trying it on to save $900.

Not paying is what the insurance game is all about.

dejadeadnz

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#1612190 15-Aug-2016 20:50

We are both landlords and tenants. This law doesn't worry me one bit. Most people aren't sociopaths that act carelessly around people's property or damage people's stuff for fun. As landlords, we insure our properties (two regional rentals) and carefully select our tenants and use reputable rental agents. We have had four sets of tenants (3 couples - 2 with kid(s); 1 single female) and had a couple of instances of accidental damage (things like old appliances blowing fuses etc). We happily ate the repair costs as the cost of doing business and just in the interest of being decent people. Everyone was happy.

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Aredwood

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#1612240 15-Aug-2016 22:28

The silly part of all of this. Is that tenants still need liability insurance. In case they cause damage to something that is not owned by the landlord. Best example - tenant accidently causes a fire and burns the house down. The fire also spreads to a neighbouring house or also causes damage to a neighbouring house. (very easy to do if the rental property is part of an apartment building or terraced house complex). The cost of fixing the damage done to the other properties will still fall onto the tenant.

What I see happening in the future as a result of this court case - Landlords will opt for no excess policies, and increase the rent to cover the extra premiums. And insurance companies will make it a condition of their policies that they have to approve tenants before the landlord can allow them to move into the rental. This will mean that careless tenants will find out that they can't get approved for any rental properties. And it will create another tenant underclass who will be permanently sentenced to living in cars and garages. As their names will be on insurance company blacklists.

tdgeek

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#1612246 15-Aug-2016 22:52

ubergeeknz:

surfisup1000:

The way it seems you people are arguing, if you have a rental with 3 tenants, then, the landlord, and each of the 3 tenants should purchase a policy to cover house damage.

IANAL, but that's how it has always worked.

eg. if you cause a car accident, and the other party is insured, they recover costs from their insurance company (in effect), and then their insurance company recovers the cost from your insurance company (if you have one), who might recover part of it (ie. the excess) from you - the accident is deemed "your fault" and therefore you are liable.

If you are a tenant, you would generally take liability insurance (often bundled with contents insurance), so that if you accidentally burn the house down you are renting, your insurance company covers that cost for you (insures you against liability).

But the judge in that case ruled that tenants are not liable for accidental damage to a property, if the landlord has insurance. That, to me, flies in the face of convential wisdom wrt. liability in the case of accidents.

Simplifying your example.

I have a car, you dent it, your insured.

My car is fixed, costs me nothing, no excess, no premium increase, as the liable party insurance company says for it (or mine paid but got recovery from the liable party's insurance company)

I give up. We sold our rental as it got damaged over time. About to sell our place as already bought another, not consider renting it. I could do, or I could rent it quite cheaply while I tidy up/fix up/improve stuff, bit TBH, bugger that. never again. It will have been empty for a few months, tough. never again.

MikeAqua

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#1612388 16-Aug-2016 11:40

As landlord if repairing careless/willful damage is important for weather tightness, security, safety or sanitation I am obliged to get it fixed ASAP.

If it's a cosmetic or comfort thing I can take my time.

Mike

Behodar

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#1612399 16-Aug-2016 11:58

tdgeek: TBH, bugger that. never again. It will have been empty for a few months, tough. never again.

Bingo. I was a landlord until February, and this news makes me glad that I stopped. I had to deal with flooding, but thankfully not fire.

Donza

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#1613369 17-Aug-2016 17:19

That's why we use a good Property Management company to handle our rental properties. Our agent knows the tenancy law inside out, knows what the tenant can and can't do (in legal terms) and she takes absolutely no crap whatsoever! She's certainly saved our bacon from tenants pushing the boundaries a couple of times. Her tenancy agreement is also water tight. Not sure if I can put names up here without getting into trouble, but she is worth every penny from a landlords perspective. I would rather pay her 8% and leave everything in her hands than have a s@*t fight with our tenants every time something goes wrong.

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