Insurers claim this is subletting and Landlord doesn’t have control?

Insurers claim this is subletting and Landlord doesn’t have control?

11:47 AM, 18th October 2021, About 2 years ago 1

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Sadly, following a bad experience, one of the sites was converted into a Cannabis Factory. After usual arguments, AGEAS accepted liability and paid for lost damage around say £50k (Insured losses) uninsured cost (£20k).

The loss was in Jan, renewal of policy in Feb and policy renewed. However, midterm AGEAS advised that they didn’t wish to offer cover as some of the properties they considered ‘sub-leases’.

The majority of the portfolio is mixed commercial – “shop and flat above.” The majority on long leases and tenants have rights to rent flats if not used by them on AST. Issue only FRI leases.

Insurers claim that this is subletting and Landlord doesn’t have control of tenants movements etc.

BUT as a landlord lease ensures tenants are responsible for the management and in any case has to pay FULL rent whether upper floors used, empty or whatever.

The total rent is say 10-15% lower, so good for them and long term they save/make some return for looking after and managing the same.

The broker was 100% aware, and he failed to report the same. After 6 weeks of finding someone to offer me insurance, we were forced to move midterm.

AGEAS returned pro-rata premium. I feel there is some unfairness from AGEAS and they wouldn’t move from their position. My broker was useless and failed to tackle this matter in the expected manner. I employed a Loss Assessor company and they assisted me nicely.

Thoughts regards AGEAS stance appreciated and what legal steps should be considered if any? Or refer the matter to the ombudsman for discrimination?

Any no win no fee or legal opinions would be appreciated or reasonable legal or fixed fee.

Many thanks


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Jason McClean - The Home Insurer

12:09 PM, 18th October 2021, About 2 years ago

Hi Hitesh

With the information you have provided above I would suggest:

1: AGEAS as the insurer is within its rights to cancel a policy mid-term if new information previously undisclosed comes to light.

2: You 100% told your broker. What you told them should be noted in your statement of fact or schedule. The insurance is based fully on the written documents and it is your responsibility to read these and agree them. If it is on there then the broker did disclose correctly to AGEAS. If not, then the broker will say it is your responsibility to read documents and ensure the cover is appropriate and as per your needs.

3: The relationship you describe above is 'sub-letting' in insurance terms. We have providers that can cope with that but many of the big providers will not permit it.

4: I suspect AGEAS has not moved from its position but once it realised you were sub-letting did the right thing and advised your policy was not appropriate. You have done the right thing placing cover elsewhere, ensuring the subletting arrangement is noted on the statement of fact or schedule and permitted within the wording.

5: I'm not sure what you would be hoping to gain by taking any legal action? Ultimately the paperwork should have been shown to you at quotation and then you accepted it. It is your responsibility the paperwork is correct and offers the cover you need.

Appreciate it may be frustrating but if you have a correct policy with the cover you need in place now and you received a pro-rata refund, I struggle to see what may be gained by legal action now.

Do let me know if I can help any further.

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