Landlord Insurance question

[markjay]

Block of flats. Landlord Insurance policy.

Leak in communal pipe causes damage to flats, insurer accepts that this is an insured event. Will cover repair costs and making good damage to walls etc.

The Leaseholders also suffered water damage to hardwood floor and carpets.

Insurers say that hardwood floor and carpets are no part of the building fabric and not covered by the Landlord's policy. They suggest to claim off the Leaseholders own Content Insurance.

Leaseholders say that (a) they have no Content Insurance cover to claim off, and (b) that they are not the policy holders, the Landlord is, and the Leaseholders are in fact Third Party.

Insurers say that the Landlord Insurance policy does not provide cover for Third Party damage and therefore the floorboards and carpets will not be covered. Leaseholders want the Landlord to incur the cost and reimburse the Leaseholders, as the damage to their flats was caused by the Landlord's property (communal pipe).

Landlord (understandably) not happy about having to incur cost of damage to items inside the flats in spite of being insured.

I will have all the policy documents in a few days to check etc, and the Insurers did not yet provide a definite answer, but I wonder... is it likely that Landlord Insurance will not cover damage caused by the landlord's property to Third Party? Or are they just being silly?

Your views please....

 

[renault12ts]

A. Landlord should have third party cover...silly not to.
B. Tenant should have cover too...silly not to.

Then let the insurers fight it out.

 

[Sp!ke]

I'm pretty sure landlord insurance covers 3rd party damage from leaks.

What would be the point in getting it otherwise?

 

[corned]

Are the leaseholders, under the terms of their lease, not obliged to carry insurance?

 

[markjay]

I'm pretty sure landlord insurance covers 3rd party damage from leaks.

What would be the point in getting it otherwise?

Presumably, to cover damage to the Landlord's own property, i.e tha fabric of the building, communal parts, etc?

 

[markjay]

Are the leaseholders, under the terms of their lease, not obliged to carry insurance?

At this point, I dont know.... will know when I see the documemts.

 

[Pitts Pilot]

Had the exact same situation in the block I have a flat.
IMHO, bottom line:-

1. LL is only responsible for insuring the fabric of the building (Check LL covenants/requirements in the Lease).

Quote: Landlord (understandably) not happy about having to incur cost of damage to items inside the flats in spite of being insured.

Are you saying the LL *does* have a form of Contents cover? Quote “...inside the flats in spite of being insured”. Surely not? See item 3 below.

2. There is no obligation for the lessee to carry Contents Insurance, unless expressly stated in the Lease under Lessee covenants, (unlikely). They shoulder the 'risk' if they do not.

Quote: Leaseholders say that (a) they have no Content Insurance cover to claim off, and (b) that they are not the policy holders, the Landlord is, and the Leaseholders are in fact Third Party.

(a) See 'Personal Note', below; and (b) I do not understand the point being made. It is merely a statement of fact, yes?

3. ‘Consequential loss’, such as damaged floors coverings, are not covered by Buildings Insurance (as normally provided by the LL) unless expressly stated in the policy. This would be very unlikely.

4. Technically, you do have recourse for consequential loss, but this would be argued thro’ Common Law, and would involve expensive solicitors and be time consuming. Therefore I suggest you discard this option.

So, the issue boils down to those *with* Contents Insurance can claim for their floors coverings & decorations, etc, albeit on their own policy. Those without CI cannot.

[On a personal note.
Those without Contents Insurance might be considered foolish or just short sighted.
Consider: Washing machine floods; plumbing leak, kitchen fire, common burglary, etc.
Often those who say they do not have CI simply do not wish to make a claim and thus blemish their claims history.]

Hope the above helps,

Robert
Chartered Building Surveyor

 

[developer]

The policy docs will make it clear what you are covered for etc.etc.

There is another dimension (assuming you're not covered) - that of whether it's in your interest to keep your tenant sweet so they stay - bigger picture and all that.

Only you know that.

In the past I've written off some "events" for the sake of tenant retention - voids can outweight the cost of renewals (and you may still have the flooring/carpets to replace).

 

[markjay]

You are correct in saying that the documents will reveal all.

There is no dispute here as such, it is more in the way of clarifying to all those involved how far does each party's responsibility go, and what can realistically be expected by way of payment from the insurers.