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.



by John

9:54 AM, 22nd September 2021, About 4 weeks ago

General comment to Carol. I am not sure if you have but talk to your insurance company. As I said before and Clint seems to agree with don't assume the loss adjuster is correct. I think Clints approach is sensible because he is happy to challenge what he is told.
If you thought you were covered after reading the policy then you had that expectation and the insurance company should explain why your expectation was incorrect.
As far as I am aware it costs nothing to take your case to the ombudsman.
If your own loss adjuster costs 15% of the claim as you say this is 15% if he wins. Surely better than paying everything yourself. Other than that he will probably charge a fee of a couple of hundred pounds but worth checking.
I can only speak from my own experience and why I tend to agree with Clint.

by Ian Narbeth

10:02 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by Clint at 21/09/2021 - 17:14
I note your experiences but they do not assist Carole. The fact that a second loss adjuster "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" does not mean that your interpretation of what the policy covers is correct.

As I have pointed out, Carole is on a hiding to nothing taking on the insurer. It is unfortunate her tenant has lost out but unless Carole wishes to go on a crusade against her insurance company, her best option is to do nothing more to pursue compensation for her tenant. Sure, she might expend a lot of time and effort an bring complaints about the LAs. She might even be lucky, as you were, to find a loss adjuster not representing his client properly. Given that the insurers have rejected the claim it is more likely that she will receive nothing save an increase in premium next year.

by Clint

10:09 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by Carole Wicklow at 22/09/2021 - 08:52
Sorry to say, I have over the years had many claims and I just go by the wording, and fortunately for me in all cases only the wording was taken into consideration as to whether I was covered or not.

I have never had to get a solicitor involved as, the Financial Ombudsman are very experienced in these areas and their decisions appear to me to be very reasonable.

If the cases went to court, the outcomes may have been quite different however, the ombudsman's decision is a final decision in respect of the business i.e. on the insurance company but not on the consumer. The consumer can then take it to court if not happy with the decision.

In respect of carpets, generally if it is fitted with grippers, underlay, etc. they are considered to be contents and if stuck down, they are considered to be covered by building insurance.

As far as I am concerned, the procedure that I have recommended does not involve any costs but only your time. So, assuming that Ian is right, I suggest that you still inform the insurance company that the policy wording covers you and the tenant and there are no exclusions saying that the clauses should be in the TA and follow the procedure all the way through.

What have you got to lose apart from your time. The financial ombudsman is free and from my experience very thorough. I would be very interested to know what the outcome is.

by Clint

10:15 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by Ian Narbeth at 22/09/2021 - 10:02
I am sorry Ian but I believe my approach to the situation is the best from having read all the comments and from my experience with loss adjusters, insurance companies, other businesses including solicitors and this is not meant to be disrespectful to you. You and others may disagree.

by Clint

10:17 AM, 22nd September 2021, About 4 weeks ago

Reply to the comment left by John at 22/09/2021 - 09:54
I am glad to see that you are of the same opinion.

by AP

7:31 AM, 25th September 2021, About 3 weeks ago

Reply to the comment left by Carole Wicklow at 21/09/2021 - 11:47
Is loss of rent not covered by your insurance? I understand the two sides of the arguments on this thread, but surely if your insurance is not covering the alternative accommodation for the tenants (who would then still be paying you) they should be paying for loss of rent?

by Stephen

9:32 AM, 25th September 2021, About 3 weeks ago

Firstly very sorry to hear of your stressful situation.
Unfortunately this can happen to anyone
Liability always fall on the landlord
If a rental property an insurance policy for letting out goes hand in hand with your mortgage provider

You agent legally speaking is not liable THEY would expect you are covered!
Please check your letting T&C
also any Basic B2 let insurance company would cover rehousing
Go straight to the ombudsman/ broker who sold you the insurance
I would pursue the insurance company

by lips24x

15:08 PM, 25th September 2021, About 3 weeks ago

Hi Carole,
This sounds an absolute nightmare for you and the tenants. I had a similar situation with a fire at one of my rental properties around 5 years ago. I had similar insurance cover to cover loss of rent and temporary accommodation for the tenants.
At no time was there an issue raised in regard to the AST. From memory the only paperwork requested related to the gas and electrical certificates.
Your policy is clearly for a rental property with tenants in place hence rent / accommodation cover in event of a claim. The AST wording appears to be a weak attempt by the loss adjuster to not pay for accommodation.
If I were in your position I would write to the insurance provider and broker politely pointing out the reasons why you believe you are covered highlighting the clauses for temporary accommodation.
In return request a written explanation as to the reasons why you are not covered and where within the policy the reasons are stated.
Once someone has to justify the decision and refer to the policy wording you may find the insurance company will have a change of heart.
This will cost you nothing financially and will not impact on your relationship with the insurance company or current claim.
You are merely requesting clarification as your policy does not seem to be covering what you believed was an insured risk

by hpbennett

16:17 PM, 25th September 2021, About 3 weeks ago

Can I correct a comment by Julian Wordsworth. Citizen’s Advice is NOT government funded - it is a Registered
Charity and it offers advice to all comers, including landlords. The only time they would decline advice is if they were already advising one side in a dispute - they could not advise the other.

by Lyndon Whitehouse

8:41 AM, 26th September 2021, About 3 weeks ago

I have claimed for alternative accommodation and loss of rent on two separate occasions as a result of and 2. Water escape
Both claims were processed successfully with the agreement of two separate loss adjusters and I do not have that clause.

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