Rental property damage: Landlords liable - court rules

[Anthonyacat]

They also dont let you under insure if you want that choice - telling customers that they are so very caring about you they would never allow you to do this. They are after all selling fear.
However if some customers want that choice, in order to keep premiums lower , cost effective & affordable they should make those options available.

Pretty sure I had that option with AMP when the Agreed Value stuff came in. I could choose just about any value and they would pay out to the lower of insured value or actual cost. But the difference in premium between insuring for $500k and $750k is so small it's silly to underinsure.

My theory is to insure against 'catastrophic risk' only. Events that would devastate me financially. At the moment, that includes the total loss of any of my properties, or the potential to crash into a luxury supercar. But I suppose in 15 years time when I will be able to afford a house or two going up in flames, I might change my thinking.

[Viking]

If they bother to have such insurance.

[wodger]

Looks like they don't have to bother now.

Ugh, imagine if this happened in your rental and you accidentally let your insurance lapse. It seems the court would just say "shouldn't have done that". Never mind that the tenant shouldn't have burned the house down.

[motivated]

Im thinking that the court ruling applies to "äccidental"damage-- ie in this case a cooking fire. Where does any of the hysteria being whipped up apply to malicious damage. I kind of suspect the ruling is unlikely to apply to a deliberate trashing.

[wodger]

Sure but it makes tenants public liability insurance not worth having. Hopefully the insurance industry doesn't take this lying down.

[Monsterbishi]

Given that the RTA doesn't cover the matter, shouldn't it be possible to protect against this outcome with a well worded condition in a tenancy agreement?

[mrsaneperson]

This is a strange case ! The Tenancy Tribunal ruled that the Tenants were liable , then the Tenants took an appeal to the District Court whereupon the Judge ruled they were not liable.
Why is this strange? Because unless the Tenants had new evidence to show they were not liable - the District Court will not hear the case & will not reverse the earlier ruling.
Perhaps some information is being left out from the media report?

[PTWhatAGreatForum]

Sure but it makes tenants public liability insurance not worth having. Hopefully the insurance industry doesn't take this lying down.

You must be kidding, right?

Why the complaints here anyway? Landlord gets paid out by their insurance company who is making a profit on the deal. Anyone who thinks the insurance company is recovering the money from somewhere else clearly doesn't know how the rules of the game:

A knock-for-knock agreement is an agreement between two insurance companies whereby, when both companies' policy-holders incur losses in the same insured event (usually a motor accident), each insurer pays the losses sustained by its own policy-holder regardless of who was responsible.

Rationale

The rationale is economic and administrative efficiency: While an insurer may be able to pursue a recovery from the party responsible for an accident or from its policy-holder, this is a costly administrative procedure. The knock-for-knock agreement simplifies recovery claims among insurers and, over time, attributes costs fairly among insurers.

https://en.wikipedia.org/wiki/Knock-for-knock_agreement

Tenant's insurance has nothing to do with recovering the money and everything to do with an industry trying to sell more products.... suckers.

The Court of Appeal made the appropriate decision.

[PonsonbyPM]

It's another reason to get serious about getting the new type smoke detectors up & running. Would it have made the fire less damaging in this case? Probably not, but it would have given the insurers a reason to bail in the early stages & cost the landlord even more.

[mrsaneperson]

Again an important point - unless the Tenants had new evidence to present, the District Court will not hear the case & will not reverse the earlier TT ruling.

As a landlord i had a tenant who challenged the Tenancy Tribunal ruling that was in my favour - he applied and was granted a re-hearing at the District Court only because he stated he had NEW evidence to present.
He turned up at the District Court with 3 drinking buddys who were prepared to give false testimony - The judge smelled a rat and ruled essentially that he had NO NEW EVIDENCE to present therefore the original Tenancy Tribunal result was upheld!

Some VITAL information is being left out from the media report.

[BigDreamer]

I struggle to understand how that ruling was put in place. Does that mean if someone hit my car 'accidentally' and my insurance company goes after them then there is a chance if the case goes to court the judge will rule those who 'accidentally' hit my car not to be responsible to pay my insurance company for the damages?

I'm having a very hard time understanding the logic behind this ruling.

[Perry]

The hassle, headaches and stress when dealing with insurance company when making even a small claim is enough to kill some people.

Indeed. That's why I use a broker as a sanity and life saver.
(And avoid small claims, as well.)

Once, after an 'event,' I did some installation work myself,
as part of the repairs. I sent the bill for the purchased items
to the insurance coy. They phoned up, asking where was the
installer's bill. When I told them I'd done a DIY, to my delight
and astonishment, the response was that I'd saved them
a bundle, so they would not be deducting any excess.

So: either I just got lucky or they aren't all a rotten lot.

[ivanp]

You must be kidding, right?

Why the complaints here anyway? Landlord gets paid out by their insurance company who is making a profit on the deal. Anyone who thinks the insurance company is recovering the money from somewhere else clearly doesn't know how the rules of the game:

A knock-for-knock agreement is an agreement between two insurance companies whereby, when both companies' policy-holders incur losses in the same insured event (usually a motor accident), each insurer pays the losses sustained by its own policy-holder regardless of who was responsible.

You are a theorist.

Knock-for-knock agreements are NOT common in New Zealand even for vehicle insurance, and as far as I know it was never used for other types of insurance. Reason: the "over time, attributes costs fairly amoung insurers" part just didn't happen in practice. Ask any car insurer, what is a "liability claim" to get an idea of how it all works in NZ.

[wodger]

Anyone who thinks the insurance company is recovering the money from somewhere else clearly doesn't know how the rules of the game.

Of course I wasn't kidding! There would be plenty of examples where the insurance company gets paid back by an uninsured person for something they caused to happen. It's happened to me.

You're implying the insurance company doesn't know the rules of the game. Unlikely.

The ruling doesn't appear to be limited to accidental damage: "In a judgement released today, the court says it's trying to decide: "Are residential tenants immune from a claim by the landlord where the rental property suffers loss or damage caused intentionally or carelessly by the tenants or the tenant's guests?" "

[PTWhatAGreatForum]

Of course I wasn't kidding! There would be plenty of examples where the insurance company gets paid back by an uninsured person for something they caused to happen. It's happened to me.

You're implying the insurance company doesn't know the rules of the game. Unlikely.

In case my key point has been lost in my choice of words, it's this:
Whether the insurance company recovers part or all of the claim value it's a sure bet they have calculated (at renewal time) to make a profit on the deal.

Case in point. I have 'full' car insurance. This costs $215.05 per year (I had the policy sitting on my shelf right next to me so it was easy to find the number). This was set entirely on questions they asked me. Say I was to move to Auckland, I expect the premium would at least double. Again, the cost was set relative to the policy holder.