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View Full Version : Help - disaster & house now inhabitable! - Insurance question



daisy
22-05-2007, 16:21 PM
A flood of raw sewage into my bathroom has rendered property uninhabitable. Water Company are responsible, but have said all claims need to come through my insurance.

I have landlords insurance, and am covered for loss of rental income. Loss adjuster confirmed that house uninhabitable, but said I cannot claim for loss of rental income, and tenants should still pay rent, as they can claim for hotel costs on their contents insurance.

Their insurers refused, so they stayed for a few days with family, but can't during the week because of work, so my brother has paid for them to stay in a hotel, and will claim the money back from the water company directly.

My brother is now abroad, and the tenants have asked me to meet them tomorrow to refund the rent.

Has anyone had experience of this and whether I should refund them any rent? I understand where they are coming from as they have been inconvenienced - they have had to ask friends to look after their dog, and the hotel is about 7 miles out of town, however they have said that they are going to put a separate claim into the water company for their incovenience.

jeffrey
22-05-2007, 16:26 PM
1. Do you have legal expenses insurance too? If so, get that insurer in and let it fight your corner.
2. Otherwise, take legal advice. What sort of "loss of rent" insurance doesn't pay out when your loss of rent is undeniably caused by a reputable plc? Tenants' hotel costs and contents insurance are irrelevant to your own claim.
3. To keep on good terms with tenants, consider refunding them but keep a note of this (get a receipt dated and signed by them) and of all other payments-out for production as evidence.

daisy
22-05-2007, 16:42 PM
Thanks Jeffrey

I don't think I have legal expenses insurance - I have liability insurance included in the policy, I have a separate 'home emergency' insurance, and rental guarantee insurance.

I have been getting conflicting advice from loss adjuster and insurance company - loss adjuster said to claim for loss of rent the tenants would need to end the tenancy and restart a new one when they move back in! Oh yes - and move all their stuff out. Just what you need when you've experienced what they had!

Insurance company adviser said this wouldn't be neccessary.

I have been going round in circles trying to get answers!

Paul_f
22-05-2007, 16:52 PM
I think you will find that the water company will have to pay for anything that is not covered under your insurance policy (including the excess) as they have more or less admitted liability, but it will probably take ages and they will resist all attempts to pay up if they can at all avoid doing so. they will expect you to claim as much as possible from your insurer. You might eventually have to take legal action against them and serve a summons through the small claims court to obtain redress to recover any monies. You will usually find they only capitulate at the last minute just before the court hearing just to see how far they can be pushed. This might make a decent story in your local press if you have problems, but don't go that route initially unless you find that you need to.

On the other hand they might be completely cooperative and pay up without any problem.

daisy
23-05-2007, 12:44 PM
Hi Paul & Jeffrey

Thank you for your help. My main worry is whether I will end up out of pocket - if I return rent to tenants, and end up having to claim this back from the water company as well as the hotel bill (which my brother has footed), or if my insurance company let me claim for loss of rent, will the water company then refuse to pay for the hotel!

My loss adjuster says the tenants cannot have both (rent refund and hotel bills paid) and is asking for their contents insurers details, which is not really any of his business, as he is loss adjuster for my insurers not theirs!

attilathelandlord
23-05-2007, 19:59 PM
The contract is frustrated if the property is truly uninhabitable.

That means the contract has ended. The tenants don't have to pay you any more rent and you don't have to pay for hotel or anything for them.

If they are homeless then they have to go to the local authority.

Your contract with them has finished and you owe them no further duty of care.

Claim for your property under your insurance company, who will then claim off of Water Co.

daisy
24-05-2007, 16:06 PM
Hi attilla

That is what the loss adjuster said, house is only temporarily uninhabitable - problem will be sorted in a week, they will have been out for just over 2 weeks. Insurance company said that they don't have to end contract & resume it.

My brother has already paid the hotel bill for them, I have now refunded rent as well. I may have to take it on the chin as a loss, but to lose 2 weeks rent is better than losing a month or more if I lose the tenants and have to find more.

I just hope my brother sees the sense in that!

attilathelandlord
24-05-2007, 16:10 PM
Sue the water company for everything the ins co won't pay then

specialist
25-05-2007, 08:12 AM
I am an insurance broker so will gladly offer true advice feel free to contact me specialist@deliteinsurance.co.uk

Paul_f
25-05-2007, 14:01 PM
I was an insurance broker for 30 years too until I sold up when the FSA stuck its nose in! I still consider what I said holds good!

daisy
29-05-2007, 16:21 PM
Loss adjuster is asking me to provide details of my tenants contents insurance, so he can pursue them for hotel bills, and says I will not be entitled to loss of rent.

I don't think it's really my business to chase tenants for their insurance details, and if Atilla is right in that tenancy over, surely I am entitled to loss of rent from my insurers and they are entitled to their hotel bills covered by theirs?

jeffrey
29-05-2007, 16:26 PM
Loos adjustor is surely trying to winnow down insurer's liablity. That's his/her job, after all.

But why would insurer offer cover against loss of rent if no payments are ever going to be made? Sounds like complaint to insurer (or, if that does not work, to Insurance Ombudsman) would be good idea.

Where's Esther Rantzen when you need her?

daisy
31-05-2007, 12:47 PM
Where do I turn to for definitive legal advice? This situation is really stressing me out - I have my tenants hassling me on one hand - so we have footed the hotel bill for them, but they also wanted rent reimbursed, and loss adjuster on the other saying that tenants are not entitled to both.

I have up till now refunded 10 days rent. It is likely they will be out for another week.

I feel I am being penalised for helping my tenants out, I think I am too soft to be a landlord!

jeffrey
31-05-2007, 13:14 PM
Where do I turn to for definitive legal advice? This situation is really stressing me out - I have my tenants hassling me on one hand - so we have footed the hotel bill for them, but they also wanted rent reimbursed, and loss adjuster on the other saying that tenants are not entitled to both.

I have up till now refunded 10 days rent. It is likely they will be out for another week.

I feel I am being penalised for helping my tenants out, I think I am too soft to be a landlord!

See para. 2 of my previous post (#12).