WARNING – Your landlords insurance may be invalidMake Text Bigger
I wanted to share with you a recent ‘near miss’ with one of our landlord’s.
We had taken on a new portfolio and as part of procedure, we attempted to carry out an inspection by contacting the current tenants. We had no success with 2 properties despite letters, calls and turning up ‘on spec’.
Ultimately we attended with a locksmith – and found that both had been used as cannabis factories. Boilers, radiators, piping and wiring had been removed and the plaster work through out damaged (I’ll produce a follow up email on how to avoid cannabis factories soon).
Insurance claims were submitted. You may think that this would be routine. Not so! Faced with a claim of over £30,000, the insurers appointed a loss adjuster on their behalf.
The first line of attack was to question whether the properties had been left unoccupied for more than 30 days and could we prove this!
We were able to show previous visits, discussions with neighbours and time stamped/geo tagged photos to support our clients position.
Then I was invited to inspect the properties with the Partner for the loss adjuster company. The insurers had put their Ace Player on the case! He stated that whilst the theft of the boiler and pipework may be recoverable, the damage to flooring, walls, carpets etc (the vast majority of the claim) was not.
It did not amount to malicious damage! He stated that is was deliberate adaptive us – changing the use from a house to a cannabis factory!
I left this argument to one side before speaking to my broker and he in turn to claims assessors. They were able to provide case law to rebut this defense.
I then put together a file of evidence, call logs, statements, photos to present – and mentioned that in my former life as a lawyer I had pursued a number of similar claims.
The claim was approved.
What was clear from this experience is that insurers, reacting to the rise in number of cannabis factories are moving quickly to deny cover. In this instance malicious damage was included, but on many policies, it is now being removed.
So the moral of the story?
- Don’t scrimp on landlords insurance. The cheapest is not always the best, and make sure you have malicious damage cover
- Make sure you have systems and processes to provide irrefutable evidence of inspections
- If you do have a refusal to pay by an insurer, be prepared to instruct a claims assessor and fight your case.
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