Cautionary tale to include fire cover clause in AST!

Cautionary tale to include fire cover clause in AST!

9:23 AM, 20th September 2021, About 4 weeks ago 51

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We own a small bungalow that we rent out via an agent. We picked a local agent as the property is too far away from our home and neither of us has the specialist knowledge to self manage.

Over the Bank Holiday, we received a call from the agent to say overnight the property had been on fire and was uninhabitable. My husband spent 4 hours fighting through Bank Holiday traffic to find the fire officer racking through the burnt out garage, the tenants in tears and the agent holding the keys and latest electricity certificate.

The agent then told the tenants that our insurance policy covered temporary accommodation, storage of their goods and transport of their goods to their new accommodation. (The garage was destroyed plus one bedroom, the kichen/bathroom /lounge/master bedroom have scorched ceilings but the furniture etc is fine).

I contacted my insurance company who arranged temporary accommodation and a loss adjuster was instructed. The loss adjuster arrived two days later and we gave her a copy of our AST. She read it and informed us that the tenants were not covered in any way shape or form by our insurance as there are no clauses in the AST stating that such cover was to be provided by the landlord – despite those clauses being in our insurance policy.

Our tenants have now had to go into emergency local authority accommodation and they have abandoned their furniture in the bungalow.

Had the clauses been in the AST the tenants would have had 2 years rental cover in another property, they would have had to carry on paying the rent for my property and the agent would still be getting her management fee.

So the moral of the story is to have a good read of your agent’s AST and find an agent who is aware of the legal liabilities that the AST covers.

Carole



Comments

by Carole Wicklow

11:47 AM, 21st September 2021, About 4 weeks ago

Reply to the comment left by John at 21/09/2021 - 08:56
Presently the cost of taking on an independant loss adjuster would far outstrip our financial liabilities. We are looking at losing £5k in rent (which is taxable, so really £4k) and having to replace carpets etc. I believe the cost of a LA is 15% of the claim? Happy to be corrected on that one, so it is not presently worth it. I'm not really up to losing that fight. Were the insurance company to get antsy about the costs of the rebuild then maybe it would be worth it.

by Martin

12:16 PM, 21st September 2021, About 4 weeks ago

Reply to the comment left by Carole Wicklow at 21/09/2021 - 11:41
How would you know if your tenant's had taken out their own contents insurance?

by Clint

13:00 PM, 21st September 2021, About 4 weeks ago

Reply to the comment left by Carole Wicklow at 21/09/2021 - 11:47
I really cannot understand why you have not taken any notice of my post. I have dealt with insurance companies on many occasions and I seriously believe that what I have written, is your best course of action.

Anyway, you only can decide what is the best action for you to take if any or to bite the bullet and take the losses. I cannot say anymore than I have already stated.

by Ian Narbeth

13:45 PM, 21st September 2021, About 4 weeks ago

Reply to the comment left by Clint at 21/09/2021 - 13:00
Clint,
I do not understand your criticism of Carole. As I have made clear in my posts, it is doubtful the insurers will pay out because the losses are the tenant's losses, not Carole's. I cannot see how getting into an argument with the insurance company and taking them to the ombudsman will help.

Nor do I agree with your statement that: "You can very easily read the insurance policy schedule yourself". I am an experienced solicitor and reading insurance policy terms and conditions is not an easy matter.

by Clint

15:20 PM, 21st September 2021, About 4 weeks ago

Reply to the comment left by Ian Narbeth at 21/09/2021 - 13:45I can understand, that damage to the tenants personal possessions would not be covered by the policy however, if the policy covered the tenant’s temporary accommodation, storage and transport of their goods to their new alternative accommodation, and the cover is only not accepted as it is not written in the TA, I would totally disagree with the loss adjuster that it is not covered unless, the insurance policy wording specifically stated that the tenant is not covered for any of the above if it is not stated in the TA.
I am stating the above as, I have had successful loss of rent and other claims on more than one occasion where the claims were disputed by loss adjusters.
I personally have read many insurance policy schedules and have not found any difficulty in reading and understanding most of them so I would disagree with you that they are not an easy matter. In saying that, I am sure there would be some very complicated ones however, the ones that I have read relating to building insurance did not cause me much difficulty.

I believe the advice I have given is very sound advice.

by Ian Narbeth

16:20 PM, 21st September 2021, About 4 weeks ago

Reply to the comment left by Clint at 21/09/2021 - 15:20
Clint, you say: " if the policy covered the tenant’s temporary accommodation, storage and transport of their goods to their new alternative accommodation, and the cover is only not accepted as it is not written in the TA, I would totally disagree with the loss adjuster".

A householder's policy would cover the householder's cost of temporary accommodation etc. A landlord's policy would not normally cover the tenant's cost of temporary accommodation. (I have just looked at an Aviva policy to check!). The landlord's policy will cover the policy holder's liability to the tenant.

The question is not: "Does the policy exclude liability for the tenant's losses?". It does not need to as they are not expressly covered. Rather the question is: "Does the landlord have any legal liability for the tenant's losses?"

Loss of rent claims are not the issue. Whilst you may disagree with me about how easy insurance contracts are, I think you have not grasped the subtleties of the situation.

by Clint

17:14 PM, 21st September 2021, About 4 weeks ago

Reply to the comment left by Ian Narbeth at 21/09/2021 - 16:20I don't want to go too much into this but, I am very glad that you mentioned Aviva as, I have had two separate claims with Aviva for two different properties with three different loss adjusters.
On both occasions, I was awarded loss of rent and between the two new for old on damaged kitchens, floors, bathrooms and other damages.
On one of them, the flat was in such a state, that the tenant had to be moved elsewhere and the loss adjuster offered agency fees, tenant's removal, referencing fees, etc. and six months’ rent in advance if I could find the tenant alternate accommodation or said that he would find them accommodation through Countrywide who they had an agreement with. It just so happened that the tenant was offered a council house (not temporary accommodation) about a week later so did not need alternative accommodation, but I was paid loss of rent & far more for the damage then I was initially claiming for.
On the second claim, the loss adjuster told me all sorts of items I was unable to claim for however, having had experience with the first claim, I was able to claim for virtually everything I tried to claim for in the first place. In this case, I complained about the loss adjuster, so they sent another one who seemed to be in a hurry to go as he had to deal with claims in the US due to some hurricanes and he just agreed with everything to get it out of the way. This was all after raising a complaint with Aviva and referring the case to the ombudsman.
The Aviva policy wording is particularly easy to read and the sections one wishes to claim for are also easy to find.
Loss assessors, usually act for the Policy Holder often on a no fee basis and take their fees from the claim. This is a possible option for Carole if she finds it all too much acting on her own behalf. I personally prefer to do it all myself as, I believe it is relatively easy.

by Carole Wicklow

8:52 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by Clint at 21/09/2021 - 13:00
I'm not ignoring your post - I think that I need to know what the total cost is before going to the ombudsman? I agree with you that the policy is reasonably easy to read and understand - reading the insurance documents I was sure we were covered. That is what has upset me so much, you think you are covered and then find out legally you are not. The loss adjuster says exactly what Ian is saying. Maybe Ian knows of a court case that proves his point?

by Carole Wicklow

9:00 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by Martin at 21/09/2021 - 12:16
There is a list of extra clauses at the end of the AST, such as the carpets have to be professionally cleaned at the end of tenancy due to the tenants having a dog, along with the clause stating they must have insurance cover. The agent has asked them to provide evidence that the insurance has been taken out. Were they to take out insurance and then cancel it, I believe they would be in breach of contract. I am not sure if legally you can make tenants take on insurance, it would make an interesting court case! We did find one policy that was £6 pcm for contents/accommodation cover of £25k.

by Carole Wicklow

9:08 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by Ian Narbeth at 21/09/2021 - 16:20
Thanks again Ian. You are saying exactly the same things as the LA. The insurance policy is easy to read and I would have stated categorically that we were covered for tenant accommodation etc. To find out legally that that is not the case has been akin to having a rug pulled out from under me. I don't know what I don't know, nor do I have any kind of legal background to argue the point.
As you can see from the heated comments here, either people don't believe me or feel I should be arguing a case I legally do not understand.


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