Can any Landlords help with the aftermath of Fire

Can any Landlords help with the aftermath of Fire

16:18 PM, 3rd April 2013, About 9 years ago 43

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magpie road fireImagine my horror whilst watching the local news on Sunday evening, seeing a row of 4 terraced houses in Norwich on fire and the end one being one of my rental properties!

I would be keen to see if other landlords have experienced a fire and what happened in the following weeks.

Luckily my tenant was away and no-one was injured. The fire started in the next door neighbours house and spread to our roof. For now the property is uninhabitable and our tenant is staying with some friends.

I am waiting for a loss adjustor to visit the house. For now however I am feeling concerned that the house is exposed to the elements and wish to prevent further damage being done. As you look up from the upstairs bedroom, the sky is visible and the weather isn’t great right now.

Although we are covered for fire damage, I am not sure what we can claim for, such as cleaning, redecorating and don’t wish to be out of pocket.

I have not had to deal with fire damage before, has anyone else dealt with fire and can give me any advice on what to expect?

As it stands at the moment, the insurance company are aware and have appointed a loss adjustor who has recommended a structural survey of the property.

Whilst the actual fire was contained within the roof, there is water damage in the 2 upstairs bedrooms. Half the roof is missing over the front and back of the house and the loss adjustor thinks we will need a new roof, ceilings taken down and asbestos tested, new carpets (which I discovered are NOT covered by buildings insurance!).

Our tenant is deciding what to do, whether to find temporary accommodation or start a fresh, I know we can claim for loss of rent, but not sure for how long, is it until we get a new tenant or when the work is completed?

We have also been told that we need to take action to protect the property as the front door was smashed to allow the fire fighters entrance, which for now this is boarded up and padlocked. I have ordered a new door, but don’t know when the insurance company will reimburse us for that.

Also, we need to have a tarpaulin put over the house, but due to structural concerns we need to have scaffolding erected first, again, it is another cost incurred upfront by us.

Due to the fire being spread across 4 terraces, it is not straight forward to just have our roof fixed without the others being done too.

Are we going to end up out of pocket because of the fire? As yet our insurance company have not been that helpful.



Comments

2:10 AM, 6th April 2013, About 9 years ago

Ian; T Mate I can assure I do know what I am talking about.
To have a rent loss policy add on requires one to have a buildings policy.
If I have a block insurance policy I am not allowed to have another buildings policy with the add on rent loss insurance.
Perhaps I come at this from the perspective of flats.
They have a unique problem.
But even rent loss on a property; somebody said 20 % of rent; well for me that is £200 quid; how does that pay my monthly mortgage of £500!? for about 9 months until property repaired.
I know rentguard don't cover my flats for rent loss if there is an existing buildings policy as I asked them!
If someone can give me a broker who will insure my flats for rent loss in the event of loss of amenity bearing in mind that I already pay for block buildings insurance only
As far as I am aware if I took out contents insurance it would not cover me for full rental loss if loss of amenity ever occurred.
The other issue is that if the tenant remains at the alternative accommodation then they will carry on paying rent so the insurance won't pay out on rent loss until your tenant surrenders the tenancy.
So please if someone out there knows an insurer that will allow ONLY rent loss add on without having a buildings policy with them please tell me.
You won't find anyone as I have asked almost every broker!
The standard answer is that to have a rent loss add on you have to have a buildings policy with us and if you are already insured for buildings with the flat block insurance policy you cannot have the add on rent loss policy.
Now do you see the problem flat owning LL have!
If somebody out there knows a broker to address my problem please advise.
6 years I have been looking!!

BobG

11:54 AM, 6th April 2013, About 9 years ago

In my insurance policy a rent loss claim is up to 20% of the building sum insured which in my case on a £250 000 insured sum was £50 000 - significantly more than my claim for rent loss.
I can understand an insurance company not wanting to split cover - I use one insurance company to cover all risks on any property including rent loss

17:27 PM, 6th April 2013, About 9 years ago

yep, it's 20% of the sum insured NOT 20% of the rent.

that's from 3 different insurance companies. via 2 different brokers.

I have a little hotel and if there was a problem where we had to close our doors, ie a fire, flood, plague or pestilence, we can claim up to 3 years loss of turnover, wages for staff, architect, demolition, all stock, absolutely everything.
whatever it takes to get us back up and running.

and that is how it should be.

17:34 PM, 6th April 2013, About 9 years ago

however, let's stay focused on the issue here.

this fire was from next door. therefore your insurance company will not be out of pocket as they will claim all costs from your neighbours policy.

just like a car claim. a car crashes into you...it's their fault so they pay for everything. eventually.
but in the meantime your company pays you to get yourself sorted and when it's all over and finished they make their claim against your neighbour.

so...your insurance company doesn't really care how much it's going to cost. because it ain't going to cost them anything.

Ian Narbeth

16:37 PM, 8th April 2013, About 9 years ago

@Paul Barrett
Is it the case that you are looking to take out RoL insurance where the landlord has effected the buildings on a block of flats (you own a flat and presumably pay towards the premium via an "insurance charge" or perhaps through the service charge)? That is a more complex situation than your earlier remarks revealed. It may well be more difficult to obtain LoR insurance in that case but the OP has a house not a flat.

I suggest you contact the insurers of the block and see if you can tack on a policy with you as named insured. The premium rate should be similar to the rate for buildings insurance, e.g. if your flat is insured for £200,000 and you want £20,000 of LoR cover the premium will be 10% of the premium for the buildings insurance. It is more complicated than that because the flat owners collectively have to pay for the block including common parts to be insured.

In the OP's case, a claim for loss of rent can be included in the damages claim. Her insurers may not bring it unless prompted as they are not indemnifying her for lost rent. I suggest she contacts them and brings a claim against the neighbour.

0:13 AM, 9th April 2013, About 9 years ago

I agree with your logic and yes you are correct i did not advise of the unique circumstances that affect flat owning LL.
So in this case somewhat off topic as far as the house burning down was concerned.
However I felt it appropriate to bring to light a particular problem that faces ALL flat owning LL.
Yes I have tried to impress upon the MA as the logic of an add on policy for Rental loss; but they weren't interested
This strikes be as somewhat peculiar from an income perspective!
There are millions of flat owning LL that would willingly pay extra on their service charges for Rent loss insurance.
I would conjecture a rather large boost to a MA income would result as a consequence!!
I know loss of amenity is a rare thing but it has happened to me 4 times now and cost many thousands of pounds!!
I am the original Jonah LL!!!

Ian Narbeth

14:41 PM, 10th April 2013, About 9 years ago

Dear "Jonah"
You have had rotten luck. I haven't had such a loss in over 20 years as a landlord.
There are numerous problems having the freeholder effect LoR insurance, including:
1. He does not suffer loss and so has no insurable interest in your lost rent;
2. You want to be sole loss payee so that you get your hands on the money;
3. Insurance is on unit by unit basis depending on the rentand he freeholder will not want to be bothered to keep up to date;
4. You as the insured need to make disclosure of all material facts, e.g. is there a burglar alarm, smoke detectors, alterations to the flat;
5. Most flat owners won't want to pay for such insurance.

You have been particularly unlucky but many LL will take the risk rather than pay for the insurance every year.

4:21 AM, 11th April 2013, About 9 years ago

Yep I see your points.
Funnily enough the insurer with which I made 4 claims on declined to offer insurance to the MA after my claims were finalised.
My claims totalled about £56000 and I wasn't the only claim on the development!!!!
Beware newbuild flats!!!!
Had I my time again I would have bought 4 sensible little terrace houses!!!.................oh well!!

Nick Pope

14:16 PM, 16th April 2013, About 9 years ago

A small response on the matter of under-insurance.

As a valuation surveyor I calculate re-instatement values every day and thet asre based on an assumption of a total loss so I use a re-building cost calculated from The Building Cost Information Service (BCIS) of the Royal Institution of Chartered Surveyors. These figures are accepted by all insurers as being the industry standard and, more importantly, as being correct (if used correctly). The public link to a calculator is calculator.bcis.co.uk/ where you can check that your cover is sufficient. You just need to calculate a floor area (external is easiest) and provide information on age outbuildings, garages etc. If you do this correctly, insure with a policy which is index linked and remember to adjust if you make changes such as adding a garega or fitting double glazing etc. the insurer really can't argue.

Now for how it insurance works in these sorts of scenarios :

Let's say you insure the building for £100,000 which is the correct figure. It is badly damaged but not a total loss. It does not matter how much the repairs are, the insurence company have to pay. This may be their own preferred contractor (who will be giving them discounts on normal rates), a contractor you prefer (if cheaper) or they can choose to simply pay out the maximum on the policy. There will be certain excesses which differ from insurer to insurer. You can undertake minimum emergency work to protect the building and contents - you will be re-imbursed one day.

Under insurance is exactly what it sounds like but there is (surprise, surprise!) a catch.

Using the example above - you insure for £100,000 but the actual re-building cost is £200,000 and you have a claim for damage for £50,000. You might think Whoopee! I've got £100,000 cover I'm OK.

'Fraid not - the insurance company will apply what is called averaging, and will only pay out 50% of the claim as you were 50% under-insured i.e.in this case £25,000.

They apply the same sort of logic to rent if contents are under-insured. Not much of a problem if you are letting unfurnished as you need only cover for carpets, curtains and white goods. Fittings (kitchen units etc.) come under the buildings insurance cover. Most buildings insurance willhave a contents add-on but insure at propert level to protect the rent portion.

I also strongly advise that you go for legal expenses cover of some sort in case the damage is as a result of a neighbours problem then you company will chase hadr to make sure they don't have to pay out a claim.

Most importantly, if you do your own insurance cover rather than through a lender check that they accept that the property will be tenanted - if you move out of your own property and continue with an original owner occupier policy you are unlikely to be covere for a tenant. Contents cover probably won't pay out for malicious damage by the tenant.

Finally I agree with the suggestion above - consider appointing your own loss adjuster or surveyor to fight your corner with insurers as they will know how the syatem works and what buttons to press - similar to skinning a cat but (stretching the analogy almost out of shape) more akin to knowing where the bodies are buried!

Finally - READ THE POLICY before you buy and make sure it fulfils your needs!

14:47 PM, 16th April 2013, About 9 years ago

Things are moving along slower than I wanted them to. I have just discovered that we are not covered for emergency access to the property. So, where the front door was damaged to gain access by the emergency services we are not able to claim for this. I will be checking my other policies as apparently this is common.

I met with a structual surveyor last week, he thinks the roof can be repaired rather than replaced. We are missing a lot of roof tiles, however have been told that matching ones can be found to fill the gaps. I am not happy with this as I don't want the roof to look odd. Does anyone know where I stand with this?

Also I have considered appointing my own loss adjustor to act for us, what are anyone's thoughts or experience on this.

Thanks again for all your comments.

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