Tenants demanding money from insurance claim?

Tenants demanding money from insurance claim?

10:26 AM, 18th November 2022, About 3 weeks ago 6

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Hi, After a flooded kitchen, it was needed to be redone and insurance helped. They also agreed on an amount for disturbance daily payment instead of alternate accommodation for tenants.

My questions are: Can the part of the disturbance allowance be used to update the kitchen to a better standard than insurance would otherwise pay? i.e new kitchen units rather than fitting the same old units only as they won’t pay for new ones.

If the landlord uses the money to update as above, is that insurance fraud?

Is there any legislation in UK that the landlord must pass on the full disturbance allowance to tenants following insurance claim?

Many thanks

Angie



Comments

Jason McClean - The Home Insurer

11:48 AM, 18th November 2022, About 3 weeks ago

Hi Angie

If you are the named policyholder, then the payment/benefit from the policy is made to you.

If it's a cash settlement then you may decide not to allow/tell the tenant about any amount for disturbance.

Insurance policies are not there for betterment, so new kitchen units is something different and it's up to you how you spend the settlement. If it's not a cash settlement, then the insurer will only reinstate as required with their contractor.

I don't know of any legal obligation for the landlord to share any policy benefit with a tenant; unless the insurer prescribes in contract how the money must be spent - check your own policy details.

However, I'd argue there is a moral obligation to let the tenant know there is financial compensation for disturbance. The money is there to offset against their inconvenience.

LordOf TheManor

16:14 PM, 18th November 2022, About 3 weeks ago

Hi Angie

I think you've got a really good answer from Jason.

If the cash is coming to you, surely all you need to do is work out what updating the kitchen is worth? If it was already worn and looking aged, after adding some money to the payout, you'd surely come out on top.

If that's your plan, let the tenants know the good news - as long as you can gurantee to be super-quick with the refit! It'll be hard to pass off as a 'benefit to them' if they're left eating out of tins or microwaving meals while they wait for 'when' with the new kitchen.

It's a high-use area so understandably the insurers include compensation for disturbance... Also, consider the time of year. It's not for nothing that kitchen-fitting drops off earlier than most trades prior to Xmas.

Good luck with whatever your choice is. It could be a win-win though!

Old Mrs Landlord

17:13 PM, 18th November 2022, About 3 weeks ago

The title of this thread does not match the facts of the matter. Nowhere does the original poster say the tenants are demanding money from the insurance payout, although they are clearly entitled to a designated proportion of it.

Judith Wordsworth

10:55 AM, 19th November 2022, About 3 weeks ago

1. You cannot use insurance money to make the property better than it was. If you want to replace undamaged units then fine at your own expense.
2. The disturbance money should be paid in full to your tenants as that is what it is for.

Gus Burton

10:23 AM, 21st November 2022, About 2 weeks ago

Reply to the comment left by Judith Wordsworth at 19/11/2022 - 10:55
The last two comments on this thread are utter rubbish. The cash settlement from any insurance payout is the insurer settling their liability. That is the sum they say they owe you. How as the policy owner you spend that is up to you. No, the tenants are not entitled to any of it, it's your policy. However, you could pay it to them if you chose to. If you wanted better cabinets then you can spend that money however you wish. The only thing to consider is if your tenants had any claim against you? To my knowledge there are no damages in law for inconvenience.

Paul Power

14:14 PM, 24th November 2022, About 2 weeks ago

Reply to the comment left by Gus Burton at 21/11/2022 - 10:23
That depends? Check the policy if you are claiming for tenant disturbance and not passing it on or incurring cost that seems dangerously close to a fraudulent claim. If you are not claiming anything for disturbance then completely agree distribute funds as you see fit.

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