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Landlords, Tenants and Insurances

Thursday, 4th October, 2018 2:00pm

Story by Louise Hogan
Landlords, Tenants and Insurances

Landlords and tenants should be very careful to understand what insurance is in place for a current tenancy and who is responsible for what.  Anecdotal evidence would suggest that many landlords and tenants are unsure of what the rights and liabilities are in the event of an incident.

The key principle that all parties must clearly understand is the principle of ‘insurable interest’.  In simple terms the landlords CANNOT insure any of the tenant’s possessions as he has no ownership hence no insurable interest. Similarly the tenant CANNOT insure a landlord’s property or his possessions as the tenant has no insurable interest.

The second key issue that is most important for landlords is to ensure that it is clearly disclosed to insurers that the property is rented. Once disclosed the policy provided will include landlords liability which extends to cover potential negligence claims due to injury suffered by the tenant or property claims suffered by the landlord. Failure to clearly outline the precise nature of the occupancy of the property could lead to indemnity issues, i.e. insurers declining to cover the loss.

A recent fire in a landlord’s property meant that the property became uninhabitable for several months.

As it was a valid landlord insurance policy the insurance company covered the loss of rent while the house was unoccupied and the cost of refurbishing the property.  The Landlord’s policy did NOT cover the tenant for any damage to his possessions, did NOT cover the tenant for any removal costs because they had to move out, and did NOT cover any extra rental costs that they incurred for the period they moved out. The only way a tenant would have got compensated for this was if they had their own tenant insurance policy which would cover this scenario. It is also the case that the tenant does not have a case against the landlord for this disruption because the onus is on them to have the proper insurances in place.

Insurance is an inexpensive inconvenience until it is needed.  Better to be covered and not claim than to be exposed to a risk and not covered.

Fergus Lowe

Director

Sherry Fitzgerald Lettings

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