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Insurance might not cover

Discussion in 'General Property Chat' started by Adele, 22nd Jan, 2016.

  1. Adele

    Adele Well-Known Member

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    Hi everyone,

    I am wondering if anyone has had any experience with landlord insurance. Just to explain the situation, a commercial IP has experienced damage due to water leakage from rain. The insurer along with tenant's builder has inspected the property and discovered a structural issue ( wall is warped and have created a gap) that might have attributed to it.

    I am still waiting on the outcome for the claim, but I am unsure how the structure report would affect it. The tenant has just moved in and as a result of this, lost trading days. The interior damage bill alone is quite significant, and I am really scared of what the $ assessment for the wall is going to be. Will the insurance company cover it? If it gets rejected is there any way for me to contest it?
     
  2. Marg4000

    Marg4000 Well-Known Member

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    Usually structural defects are not covered by standard insurance policies.
    Marg
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    a) Unlikely
    b) Check the lease - what did the tenant do to mitigate the damage? When did they advise you of the leak? Was it pre-existing? How long did it take for you plumber to attend? What was done to stop the leak eg: tarp?
     
  4. Adele

    Adele Well-Known Member

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    Hi @Marg4000 , @Scott No Mates
    Just to be clear, not covered for structural defect? But will it cover interior damage?
    The leak happened mid way through renovations when tenant took over and they contacted the PM and insurance right away.
     
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    Without knowing what is in your policy, it is a bit hard to say yeah or nay. What is your broker advising? It may be likely that the damage to the tenant's property/fitout is covered (firstly through their insurance, then counterclaimed through yours). As for the structural damage how was it caused? Was it discoverable etc?
     
  6. melbournian

    melbournian Well-Known Member

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    Read ur policy - if it is a legitimate leak and caused internal damage u should be able to
    Claim some damages.

    Normally get 3 quotes and compare. Loss assessor works to cut down the payout

    If it gets rejected make a complaint to them
    And if no action, lodge a case with the financial ombudsman.
     
  7. Marg4000

    Marg4000 Well-Known Member

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    If it happened during renovations then the builder may be responsible.
    Marg
     
  8. Adele

    Adele Well-Known Member

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    It was implied that structural defect was pre-existing:(
    Thanks everyone. I'm mainly holding my breath and trying to mentally prepare myself for the worst, but at the same time trying to console myself by finding out what my chances are.
     
  9. JacM

    JacM VIC Buyer's Agent Business Member

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    Unfortunately insurance doesn't always cover damage caused by water that falls from the sky. I recall when I first heard the notation by prospective insurers... that they'd only cover flood damage by water that rises from the ground up. Needless to say they are not my insurer. Trap for young players. Always check that water damage is covered both in the "rising from the ground up" and "falling from the top down" situations.
     
  10. Adele

    Adele Well-Known Member

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    Thanks @JacM , does certainly feel like a trap if it doesn't get reimbursed. Still keeping fingers crossed that it will. I've gone through the contract, but it was not specific about water damage ( falling or from ground up ).

    The wait is nerve-wracking, and I'm certainly going to put this experience under another 'lesson' learnt.
     
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  11. melbournian

    melbournian Well-Known Member

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    They have to give some correspondence every 10 business days
     
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  12. Adele

    Adele Well-Known Member

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    That"s good to know. Currently in contact with broker and PM. Still waiting on some reports apparently.
     
  13. Adele

    Adele Well-Known Member

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    Hi everyone, I'm after more advice,

    After some negotiations with insurance broker, the amount that will be paid out falls short of the costs for repair of water damage.
    As the tenants were midway through their renovation when damage occured, the contractor started on some of the repair works prior to the insurance surveyor's inspection. It seems that the PM approved this work without our approval as well as the insurance's knowledge.
    Further compounding the mistake, the PM first contacted insurance 20 days after damage occured. The timeline is as follows

    27th Oct- Lease unconditional, tenant fit out start

    4th Nov- Storm damage occured mid fit out

    5th Nov- We were notified by PM and requested for insurance details. Gave details that day.

    24th Nov- Initial contact by PM with insurance, along with them submitting a quote from same contractor carrying out fit out. Reason being, to expedite renovation so as not to miss opening date. It would be extremely difficult to get a different contractor so close to Christmas, and having 2 different contractors doing works will result in chaos.

    25th Nov- Claim lodged

    30th Nov- Inspection by surveyor.

    Between 24th to the surveyor's inspection, repair has started. I'm assuming the PM gave the go ahead, as it was not approved either by me nor the insurance. I've only become aware of this (including the late lodgement of claim) when I received a letter from the contractor's legal rep late Feb demanding payment. Since then, the insurance has increased the payout but it is still 1/3 short from claim. This difference is very hard to determine as surveyor could not see all the damage as part of it has been repaired.

    Is there any advice that anyone can give me on how to proceed from this point on.
     
  14. Azazel

    Azazel Well-Known Member

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    As above, you need to check your policy.