Damage claim confusion
Question from Peter updated on 6th June 2017:
My previous tenant caused lots of damage to my rental property. I took the case to the Tenancy Tribunal and an adjudicator ruled the tenant didn't need to pay a cent for the careless damage he caused as I have insurance covering the property. (This was based on the Holler v Osaki ruling). But when I made a claim to my insurer, my claim was declined because my policy doesn't cover careless damage or gradual damage.
If my insurance policy doesn't cover the type of the damage caused by my tenant, even if the damage was not caused intentionally, can I get compensation from my tenant? Should the Holler v Osaki ruling be applied to my case?
Our expert Myles Noble responded:
This is an interesting angle on the ramifications of the Holler vs Osaki decision. The precedent set by the decision reduces the ability for landlords to recover from tenants where they have caused damage to the landlords’ property. The few types of claim that may be exceptions to this decision are where the damage was caused intentionally, was an imprisonable offence or where the tenant compromises the payment of insurance funds.
In this last regard, I am not sure that the Tribunal adjudicator has made the correct interpretation of the law in this instance - as you say you went to the Tribunal before approaching your Insurer. Ideally, where property damage has been experienced, I would always recommend that a landlord lodge a claim with their insurer before proceeding to the Tribunal.
Myles Noble is head of claims and earthquake response for Crombie Lockwood. He also holds various advisory board positions in the insurance industry.