What Insurance & Which Company?

[BusyLizzy]

Something to consider: even if you DID manage to get an order to have the damages paid through tribunal and IF you can actually find the tenants to serve the order , it would most likely be at a paltry $5 a week. I know of landlords that are still recovering money many years later.

Be sure to read up on the processes, etc for handling disputes and tenancy issues so that you are fully prepared to act immediately the second something starts to go wrong. The Tenancy website is a good place - and troll through the threads in the Tenants section in PT. Be sure you understand:

- how and when to issue 10 day notices
- how and when to apply for tenancy tribunal hearing
- how and when to do inspections
- the difference between mediation and tenancy tribunal - and when to use each
- your rights as a landlord (or lack of, as the case may be!)
- the rights of your tenants

and of course, do a weekly check on your bank statement each rent day to be sure the rent has been paid. If it's not, issue a 10-day notice immediately - in spite of their assurances that it's a 'bank glitch' or whatever. Better to get the process underway 'just in case'.

Also - be very aware of the time it takes to get a tenancy tribunal or mediation hearing. I believe the times can vary around different parts of the country. I know it took something like 4-5 weeks in South Auckland - which is a LONG time if you don't have any rent coming in over that period.

Hope this doesn't sound like I'm trying to scare you or otherwise be critical of your decision. Far from it - just trying to help make sure you are a 'prepared' landlord. I am, of course, painting worse-case scenarios. I had a couple of bad experiences - but I've also got some great trouble-free tenants as well. It just helps to be armed with information.

Are you covered if the tenant deliberately burns the house down?

Interesting question! I had a situation once where the kids in the backhouse set fire to some rubbish under the front house! Fortunately the front-house tenants smelled the smoke almost immediately and used the extinguisher (that I had provided) to put it out before any damage occurred. I always wondered what the insurance company would have done in this case if there was damage.

[Green Fish]

Tenant Torches House

It depends on the policy wording.

So owners should check the policy wording - and should NOT rely on the summary provided by the broker.

[Flyover]

Thanks guys. All good points to be kept in mind. Great to have lively discussion

[micheleco]

I had a fire 9 june (burglary of furnished house and arson) which gutted the 8 month old house, and a burst pipe in an older house same week. I have insurance thru Crombie Lockwood using NZI. NZI refuse to pay out on loss of rent insurance as they were both empty and no pending tenants (the new house by only two days). It took 5 weeks for assesors handiman to come and quote the old house, by then i had my own builders on the job. And two months to get plans redone for new burnt house. so Im fighting with brokers and assessors that its unrealisitc to not pay out rent for length of time time the houses will be empty (prob about 6 months at this rate for the new house). Im looking at other insurers now, stuff these weasel out clauses by NZI.
All the while Im panicking as I have met a couple who had their entire insurance proceeds taken by ANZ to pay back the mortgage on their rental that burned down.And ANZ charged break fees to make them do it.

[Green Fish]

Given that one claim involves the destruction of a new house, this is obviously a situation involving hundreds of thousands of dollars. The 'loss of rent' cover is a secondary issue.

The problem is that if you dispute the refusal of the 'loss of rent' cover, the insurance company might put pressure on you by delaying/stalling the payout to rebuild the house that was burnt down. So you need to tread carefully. You want the house rebuilt as soon as is possible - but you also want to be able to challenge the refusal to cover the loss of rent.

As regards changing insurers, you should definitely take no steps in that regard at this stage. It could cause you major problems with future cover.

You must get expert advice, and pay around $350 an hour for it. The best advice will be found within a firm of solicitors that acts for insurance companies - but not NZI.

The following Auckland firms have an established reputation in insurance matters: Jones Fee, Heaney & Co, McElroys, Keegan Alexander.

[micheleco]

The amount of Loss of rent cover covers the mortgage, no rent , no mortgage payments. Deep doggy doo. Yeah will have to go the legal route at some stage. Know any in Hamilton? Will change the other 12 houses that arent burnt or flooded to another insurer tho ;0) in the meantime. Last thing I need is another fire and crappy cover from NZI.

[donna]

How do you claim for loss of rent with no rental agreements? Or am I missing something? Did you have a rental agreement that was due to start in two days time? If so it would be hard to not pay out on that - wouldn't it?

Cheers,

Donna

[Green Fish]

You definitely have remedies re the 'loss of rent' cover, and you will get a fair hearing at low cost before the Insurance Ombudsman. Check their website: They often find against the insurer.

But your main goal, I assume, is to get the charcoal house rebuilt as soon as is possible. This could take more than 3 years. If you wait until then before disputing the refusal of the rental cover, you will probably encounter time-limit issues.

I reckon it's worth a trip to Auckland and around $1000 to get some decent advice.

I don't know of any specialist insurance lawyers in Hamilton, but that means nothing, and are I assume that such lawyers exist. But the four Auckland firms that I listed definitely act for insurance companies on a regular basis - and I'm reasonably sure that one of the four probably acts for NZI on litigation matters.

So why not get advice from one of the other three? The best poacher is the gamekeeper.

[micheleco]

Yeah no pending rental agreements is the problem, even tho it had been rented, little weasel out clause as I put it. But as it burnt down two days after tenants moved out, I cant rent it out as is anyway. so still loss of rents, current or future.
So how do hotels get on if one of their units burns down while empty between guests??
Yes ombudsman, and yes lawyers. Has also raised a question of if the house is on the market and burns down, no mortgage cover as cant rent it, but also cant sell charcoal briquets either. Mortgagee sale here we come!

[Green Fish]

(1) Get the actual policy wording.

(2) Does the alleged "weasel out" clause clearly support the insurance company's interpretation?

(3) If not, and if it could go either way, then you win: If the policy wording is ambiguous, then the policy wording will be interpreted in your favour. You have 150 years of insurance caselaw on your side.


But, getting back to my original point, what if the insurance company decides to lump everything together. In other words, they won't rebuild the charcoal house unless you drop the 'loss of rent' claim?

[micheleco]

Weasel out clause says they will pay out on "actual rent loss", which they are taking literally. Guess i would take it to mean "i would actually lose 6 months rent" with the house being burnt.
Loss of Rent
If we agree the home cannot be lived in following loss covered by this policy we will pay the actual rent lost during the period the home remains uninhabitable due to the loss.
The most we will pay under this Additional Benefit is $30,000.

If they lump it together then i have another battle. sigh. And a giant charcoal briquet on the lawn until then. So far tho, they have agreed to rebuild and have submitted tender documents for quotes.

[Lynda]

Hi Micheleco.

Wow - you're having a really tough time. And insurance companies wonder why they have such a bad reputation.

I struck a similar thing, but in a much smaller context.

My sitting tenant gave me three weeks notice. I'd done an inspection about 3 months before, and all had been well at that time. When I did the bond inspection on moving day (which was December 24th!), it turns out that he had gone away for a weekend and left his dog locked in the house. You can imagine the state of the place (and the smell). I had already started to advertise it and had people coming to view it over the next few days. Of course, they couldn't move in until after the carpet and vinyl had been replaced.

The insurance company invoked the same clause, stating that they wouldn't cover loss of rent. My broker went in to bat for me, and was able to get them to pull their heads in. I ended up being paid the loss of rent.

Did you use a broker to insure with NZI? If so, they may be able to lean on the insurance company on your behalf. They bring a lot of business to the insurer, and they may have a bit more leverage than you do on your own. I find that this is where brokers actually make the most difference. They are not necessarily providing cheaper premiums, but they are able to give advice about necessary coverage at the start, and then make sure that you get what you paid for if you ever claim.

This particular interpretation of that clause really bugs me . The fact is that if the house was standing you could rent it within a few weeks. A fairer way to apply that clause when you are between tenants is to deduct a couple of weeks for you to notionally find a tenant, and then pay out market rent from then.

Your question about the hotel room is a really good one. I doubt that a large hotel chain would put up with insurers behaving in this way.

Stick to your guns. I think they are trying to bully you. Don't let them.

Best of luck,
Lynda.

[micheleco]

Thanks for that, yes I use Crombie Lockwood, who our NZ property Investors assoc have a discount deal with, as I am on the committee of our Waikato Assoc I have pointed this issue out to our committee and we are seeing what the results are and may be recommending other brokers if this doesnt go well

[Dean@Massiveaction]

Good insurance companies??

Interested in anybody's recent experiences with house insurance or landlords policies. Good, bad or ugly??
Ours is up for review so wanting to decide who to get quotes from??

[Keely]

I can recommend someone not to go to... Vero... Major troubles there, have now changed to Lumley and no problems there.