HMO tenant barricaded room and started £80,000 fire
A month ago, one of my tenants in an HMO barricaded himself into his room and started a fire. He was rescued by the fire brigade, and although initially pleading mental health issues, has now been charged with arson and is on remand.
I am looking at a repair bill of circa £80,000 I think. I insured through Reich on the advice of this website, but the insurers, LV, are on the cusp of refusing liability, based on small print. I had declared the building to be an HMO, but they needed it to say “bedsit” as well, apparently. They have not said NO yet, but my loss assessor feels it is coming.
I have lost seven other tenancies as a result, and three others are living in tents in the garden. The council has imposed a prohibition order until the fire alarm is repaired/replaced, and this has been delayed at the behest of the insurers to find the cheapest option for reinstatement (before actually accepting liability ).
So my questions are:
1. Have I any other recourse other than just shelling out if LV decide to refuse liability?
2. Should one fight such a decision with lawyers or ombudsman or both should it come?
3. Any comments on the use of loss assessors? I took one on to supposedly help me in this difficult time, but he seems to be a prophet of doom more than anything else.
4. Should tenants who cannot sleep in their rooms , but still use them for storage of belongings still pay rent, maybe at a lower rate?
Ian
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'Central Funds'? Maybe the council will never learn!
Member Since September 2017 - Comments: 10
8:55 AM, 24th August 2018, About 8 years ago
Reply to the comment left by Ian Simpson at 24/08/2018 – 03:29
The Insurance Reform Act 2015
https://blog.lvbroker.co.uk/2015/04/08/insurance-act-reforms-2015-what-it-means-to-you/
https://blog.lvbroker.co.uk/2016/05/10/insurance-act-not-long-now/
http://www.legislation.gov.uk/ukpga/2015/4/contents/enacted
Your insurer will understand that any delay on their side potentially increases their liability towards your claim for rental income.
I believe that you should act as if you were uninsured to minimize the claim overall, so if you can possibly afford to go ahead with fire alarms, etc, you should, in order to get back to business asap. You can continue to discuss their liability for as long as it takes alongside this process.
Member Since July 2013 - Comments: 2002 - Articles: 21
9:50 AM, 24th August 2018, About 8 years ago
Reply to the comment left by Claire Abel at 24/08/2018 – 08:55
“I believe that you should act as if you were uninsured to minimize the claim overall, so if you can possibly afford to go ahead with fire alarms, etc, you should, in order to get back to business asap”
Claire is trying to be helpful but you need to be careful. I appreciate you are “in limbo” while the insurers make up their minds but you don’t want to find that they refuse to indemnify you, not because they avoid liability, but because you did works before you obtained their authority. Check the policy wording and speak with your broker about this. Ask the broker to intervene to negotiate with the insurers.
Member Since September 2017 - Comments: 10
10:01 PM, 3rd September 2018, About 8 years ago
Congratulations Ian on getting the result you needed!
Member Since June 2014 - Comments: 106
10:03 PM, 3rd September 2018, About 8 years ago
Good news Ian & well done, but what a waste of time and energy for you and the tenants.
Member Since June 2014 - Comments: 106
9:01 PM, 9th December 2018, About 7 years ago
Good news! It was instructive to hear about your struggles with the insurance company. Thanks for sharing.
Member Since August 2013 - Comments: 788
10:07 PM, 9th December 2018, About 7 years ago
I think though not 100% sure that landlords are duty bound to inform the insurers if there is any dispute with any of your tenants or if you have served a notice to any tenant, I have a tenant who would not want to leave unless he is physically thrown out by bailiffs, so I better notify my recent serving of a notice under S8 to him just in case he tried to do something foolish, I may even have to link my fire alarm to text alert me using a sim based alarm equipment. (remote signalling )