Renting and Damage Liability

bobbified on 09/09/2021 - 16:03

I came across this article this morning about a couple who is being chased by their landlord's insurer after a fire started in the kitchen while they cooking at their rented home.

Thought this would be a good reminder for those who are renting.

There are a lot of people who think that when accidental damage occurs, things will be fine if they can simply pay for the excess on their landlord's insurance policy to get things fixed. However, this is not the case. If you caused the damage, you can still be liable to pay for it (regardless of whether your landlord has insurance or not) - If it's not the landlord chasing you, then it'll be the landlord's insurer chasing you to recoup the money they paid out.

The only way to mitigate this risk is to have your own insurance (Renter's insurance usually has a public liability component) policy.

Anyone willing to share their stories about any damage they've caused while they were renting and been chased by the landlord's insurer?

Home & Garden

Comments

  • Jimothy Wongingtons on 09/09/2021 - 16:13
    +2

    I was going to say why would they assume the landlord's insurance would cover the tenants as well, then article went on to say this is a really common occurance for people to assume they are covered..wow…

    • Cheapskate Paul on 10/09/2021 - 01:24
      -3

      Who really pays for the insurance though? The tenant pays the rent which is used to pay for the insurance. So the tenant pays for the insurance via the landlord but is not covered for accidently causing a fire. Crazy $hit!

      • anthman on 10/09/2021 - 09:43

        Isn't rent revenue for the landlord, from which costs are incurred? (Commissions, bills the landlord pays, THEIR own insurance etc…) - these are their choices on what they spend on and profit changes based on that. Unless it's in the agreement, you are paying for use of the property, not for part of your rent to be used for being included in their insurance policy.

  • orangetrain on 09/09/2021 - 16:16
    -5

    They are talking about accidental, not malicious/intentional damage.

    For example, a neighbour smashing into your garage door of the house you're renting means its on you until you can prove otherwise.

    • bobbified on 09/09/2021 - 16:20

      They are talking about accidental, not malicious/intentional damage.

      You're liable for the damage you cause. The difference is if it was accidental damage, your own public liability insurance (if you have it) would cover you. If you caused the damage intentionally, even your own insurance will not cover you and you're on your own when the landlord's insurance comes after you.

      • orangetrain on 09/09/2021 - 17:00

        Yes, as article said, renters are being chased for accidental damage.

  • Tomhaigh1 on 09/09/2021 - 16:32
    +1

    Any recommendations for renters insurance?

    • bobbified on 09/09/2021 - 16:40

      I personally haven't rented for a few years now, but when I did before, I had AAMI policies. The prices etc are going to vary based on how much your contents are worth. The standard public liability insurance seems to be $20 million.

  • tsunamisurfer on 09/09/2021 - 16:38
    -5

    I am in favour of (the insurer) chasing the renters for the damages.

    Just because the damage is accidental where the renters 'didn't mean' to do it means nothing.

    The very same thing happens with traffic accidents, many if not most traffic accidents are not intended or real accidents.

    But the insurer will pay the insured out today less excess then chase the 'at fault' party (or their insurance companies).

    • bobbified on 09/09/2021 - 16:43
      +2

      If someone damages something that's not theirs, they should expect to pay for it.

      The purpose of my post was to remind and let people know that their landlord's insurance doesn't necessarily cover them.

    • lunchbox99 on 09/09/2021 - 16:56
      -3

      That is not even remotely the same. The tenant is in a commercial arrangement with the landlord. Their assumption (perhaps falsely) is that their rent pays for the landlord to have building insurance ie the tenant is actually paying for the insurance taken out by the landlord by it being factored into the rent cost - which is a common arrangement for commercial leases.

    • JimB on 09/09/2021 - 19:37
      +1

      Not sure why you're being downvoted.

      Someone's got to pay for the damage.

    • Euphemistic on 10/09/2021 - 12:17

      Would you be happy to have home and contents insurance, then when you have an accidental fire the insurance company comes to you for payment? It’s the same thing. You have insurance so they pay for damages. Otherwise, what’s the point of insurance.

      • tsunamisurfer on 10/09/2021 - 12:36
        +1

        I would hope that you know the difference between an individual purchasing a policy designed to provide coverage for oneself vs paying rent.

        • Euphemistic on 10/09/2021 - 14:53

          What you said was the insurer should chase the party at fault for everything.

          If the LL has insurance and a claim will chase the tenants then tenants are going to have to get renters insurance. Fair enough I guess, but I’ll bet the LL insurance premiums don’t drop to make up for all the extra the insurers collect from tenants.

          That’s ok if the system is going to change, but presently the rent is supposed to cover the insurance premium for the building. Eg the tenant is already paying for insurance.

          • tsunamisurfer on 10/09/2021 - 14:59

            @Euphemistic:

            but presently the rent is supposed to cover the insurance premium for the building. Eg the tenant is already paying for insurance.

            No, the rent the tenant pays covers…umm…rent.

            • Euphemistic on 10/09/2021 - 15:12

              @tsunamisurfer: Seems you don’t get it. Rent pays for the property that is lived in. Rent pays for rates, loan repayments, repairs and maintenance … and landlords insurance and some profit occasionally

              Did you think 100% of the rent goes into the landlords pocket and they don’t have any expenses?

              • tsunamisurfer on 10/09/2021 - 15:20

                @Euphemistic:

                Did you think 100% of the rent goes into the landlords pocket and they don’t have any expenses?

                when you go to Woolworths and purchase a carton of milk, do you consider you have purchased some of the shelf it sits on, some of the lights, some of the CEO's time, and some of the storage space in the back?

                • Euphemistic on 10/09/2021 - 15:23
                  +1

                  @tsunamisurfer: Of course. Did you not?

                  Did you also consider that your milk purchase pays for Woolworths insurance or do you need shoppers insurance in case you pick up the milk and the whole shelf collapses and their insurer chases you for the costs to repair?

                  • tsunamisurfer on 10/09/2021 - 15:35

                    @Euphemistic:

                    Did you also consider that your milk purchase pays for Woolworths insurance or do you need shoppers insurance in case you pick up the milk and the whole shelf collapses and their insurer chases you for the costs to repair?

                    The shelf is not in my possession, it is not my duty of care to keep the shelves stable, any other shit examples you wish to do?

                    If I drove my car into Woolies and totalled the shelves then yes I am liable to pay Woolies' insurers even if I bought a carton of milk 5 mins earlier.

          • bobbified on 10/09/2021 - 15:41
            +1

            @Euphemistic:

            insurer should chase the party at fault for everything

            This is the exact reason why there is often a "public liability" component attached to insurance policies. It protects the policyholders.

            but presently the rent is supposed to cover the insurance premium for the building. Eg the tenant is already paying for insurance.

            aaah.. no. It doesn't work that way. Nowhere does it say that the rent you pay covers any type of insurance whatsoever. If that were the case, it would be pointless for companies to sell Renter's insurance.

      • bobbified on 10/09/2021 - 15:35
        +1

        You have insurance so they pay for damages. Otherwise, what’s the point of insurance.

        In this case, the landlord has purchased insurance for their property- ie Landlord's insurance. The tenant has burnt down the kitchen. The landlord has claimed the damages on their landlord insurance policy (which doesn't cover the tenant). The landlord insurance company then tries to recover the amount from the tenant who caused the damage.

        IF the tenant had their own insurance (Renter's insurance), they would send the bill to their insurance company for payment and that would be the end of it. But the tenants DON'T HAVE insurance, so they (should be) stuck with the damages bill.

        • Euphemistic on 10/09/2021 - 16:18
          +2

          I’d never heard of renters insurance before. I’ve never seen it advertised either, but regularly see landlords insurance advertised.

          What’s the deal? Is it new or just uncommon?

          I haven’t rented or been a landlord for a long time. When I claimed for a kitchen fire as a lanlord pretty sure they didn’t chase the tenants.

          • bobbified on 10/09/2021 - 17:24

            @Euphemistic: Renter's insurance is similar to Contents Insurance, with the addition of things such as temporary accommodation (if the place you're renting becomes inhabitable) and public liability.

            I'm not sure when it was introduced, but it would've been at least 10 years ago because that's when I started renting. I originally got it just for the public liability and alternative accommodation because the building I was living in was new, but had a lot of defects and apartments below my level kept getting flooded.

            When I claimed for a kitchen fire as a lanlord pretty sure they didn’t chase the tenants.

            The insurance company doesn't actually tell you that they'll attempt to recover the costs later. The dealings you have with them is just between yourself and the insurance company. And then after that, it's between them and the party they try to recover the costs from. The policyholder (ie, you) is not involved in the recovery process at all so they usually won't notify you.

  • anglais on 09/09/2021 - 16:48
    -5

    Landlords bending over their tenants and asking them to say thank you. At least COVID hasn't changed everything in Australia.

    • bobbified on 09/09/2021 - 16:57

      Landlords bending over their tenants and asking them to say thank you.

      I can't say that I agree with you here. The landlord is simply taking out insurance to protect their asset.

  • JimB on 09/09/2021 - 16:54
    +4

    The only way to mitigate this risk is to have your own insurance (Renter's insurance usually has a public liability component) policy.

    Another way to mitigate the risk is to contact the media. On Thursday afternoon, after the ABC published this story, Suncorp apologised and waived its demand for the money.

    I wonder what % of tenants have contents and accidental damage insurance? I suspect some will have the former and very few would have the latter.

    • tharlow on 09/09/2021 - 17:25

      Of course, they don’t go into specifics as to why they were wrong, or what has been done to stop it happening again… or even corrections to those in similar situations…

      Or maybe this was just damage control…?

      Time to get a fire extinguisher for the kitchen…

      • ShannonN on 09/09/2021 - 18:08
        +1

        you'd think the compulsory fire/smoke alarm would have been screaming its head off alerting them?

        • tharlow on 09/09/2021 - 19:28
          +1

          Alerting them to order a fire extinguisher on Amazon.com? I heard Prime was quick, but I think 000 is quicker.

        • bobbified on 09/09/2021 - 20:39

          …screaming its head off alerting them

          The article says that the couple were standing right there when it burst into flames.

          • tharlow on 09/09/2021 - 21:15

            @bobbified: They might have been playing with… their phones? Never hurts to have a loud beep to de-glue your eyes… I sometimes go to sleep with the relaxing crackle of a (simulated) roaring fireplace.

            • bobbified on 10/09/2021 - 13:36

              @tharlow:

              They might have been playing with… their phones?

              Umm.. no. lol.

              Obviously, you haven't read the article, so let me quote from it for you:

              "I called Luke over and asked him: 'how hot do you think this is?'
              "And in the process of us figuring that out, it burst into flames."
              She and her partner Luke Sierakowski frantically tried to douse the flames and immediately called the fire brigade to their home in Horsham in western Victoria.

            • Ghost47 on 10/09/2021 - 14:40
              +1

              @tharlow: It sounds like they have no idea how to cook. The article mentions the girl had some oil on the stove and had no idea how hot it was so called her partner over then it burst into flames lol.

              It must have been pretty damn hot if it just ignited all on its own, and if it’s a grease fire you can’t just throw water on it. Who knows if they had a fire extinguisher (dangerous in this situation also) or blanket on hand, but it sounds like they didn’t since they had to call the fire brigade.

              I’ll be surprised if they don’t burn down the house they’ve bought.

      • JimB on 09/09/2021 - 19:34
        +2

        I'd probably say damage control, plus the fact it may be difficult to recoup all the costs.

        Looked nothing like $77,845 worth of damage.

        • tharlow on 09/09/2021 - 21:21

          Looked nothing like $77,845 worth of damage.

          You have a point! Typical ABC News article… never bothers to delve into specifics.

          Still… the subjects of the article definitely got their… 8-cents?-a-day worth.

        • Ghost47 on 10/09/2021 - 14:32

          Yeah $77k for that much damage seems weird. Surely you could renovate a whole kitchen for less?

          • JimB on 10/09/2021 - 15:15
            +1

            @Ghost47: While there's probably a bit more damage to just the kitchen itself, you have the ceiling, electricians, painters, damage to put out the fire, plus engineers to assess any structural damage, there's nothing to indicate it would by anywhere near $77k.

            A brand new kitchen like that wouldn't be more than $15k to replace in full, $20k once you factor in appliances.

            • bobbified on 10/09/2021 - 15:52
              +1

              @JimB:

              …you have the ceiling, electricians, painters, damage to put out the fire, plus engineers to assess any structural damage, there's nothing to indicate it would by anywhere near $77k.

              Got to also factor in the "insurance margin" into the total cost for each person that does an assessment or does some work. (Similar to how mechanics jack the quotes up when they know insurance is involved).

  • Ghost47 on 10/09/2021 - 14:30
    +1

    If your tenants burn your property down or damage it using fire that’s on them. I’m not surprised this is happening, people are stupid. They didn’t even seem to follow up and just moved out haha!

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