How to Recovery Money on Landlord Insurance Claims

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How to Recovery Money on Landlord Insurance Claims

How to Recovery Money on Landlord Insurance Claims
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One of the best ways insurers can mitigate claims costs is to increase recoveries. Claims recoveries is simply collecting the cost of the claim from the at fault party. An example is when a tenant’s vehicle hits a roller door. The insurer pays for the repairs and then has to attempt to recover the repairs for the roller door, from the car driver, or their insurer. 

There are external insurance claims recovery specialists, such as Debt Recoveries Australia, that specialise in this area. The insurer simply outsources the recovery to an insurance recoveries specialist and they collect the repair costs from the at fault party. They can handle the whole claim from the start, initiate investigations, locate the at fault party, settle disputes, get payments and handle instalments. 

These specialists, such as DRA, know all the tips and inside information, about when a claim becomes recoverable, what claims are more likely to be recoverable and how to do it. 

It’s not currently mandatory for landlords to take out landlord insurance, however, it’s recommended for rental properties, since there are so many claims that you can make you probably didn’t even know about and most of them usually have some right of recovery against an at fault party. 

Types of landlord insurance claims and how to recover 

Here is a list of the most common landlord insurance claims and the subsequent potential recoveries that can be made off these claims. 

  1. Loss of rental income

This is probably the most common landlord insurance claim made and can arise due to several reasons, including tenant defaults on rent, tenant damage to the home, which render it unhabitable, can also cost rental property owners financial losses and further loss of income due to inability to rent the property. 

How to recover the money?  

  1. Information is power. The more information you have on the tenants, the easier it is to locate them and negotiate payment. Get hold of the rental agreement. It has lots of information on the tenants, including mobile numbers, emails addresses, referees, etc. 
  2. Rental tenants insurance- ask the tenant if they have insurance that will cover them for this loss. Some tenants do take out a contents insurance policy that may also cover them for damage or inability to pay the rent. 
  3. Act fast. The faster you action these recoveries, the easier it will be to firstly locate the renter, secondly, to recover the money. 

 

  1. Weather-related damage

Another very popular claim on landlord insurance. Very rare to have an actual recovery on these claims. Usually a recovery will arise as a result of faulty workmanship. An example would be insufficient run-off, due to a design fault in the building or landscaping or lack of “make-safe” work on a new or renovated building. 

How to recover the money? 

  1. Investigate. If it’s water damage, first investigate how the water flowed into the property. Was it due to insufficient drainage? Or faulty workmanship on the building that was recent? Ask the tenants if they noticed anything unusual. 
  2. Contact trades people involved with the build. Often they will have more information on the at fault party. 

 

  1. Escape of liquid

This is claims for water damage, which includes bursting pipes, overflowing baths, leaking roofs, and sewage back-up. 

A lot of these claims can be recoverable, for instance, if the damage is due to the tenant’s negligence or faulty installation of water items. 

How to recover the money? 

  1. Talk to the tenant. Often a phone call can make clear any negligence on behalf of the tenant, or provide more information on circumstances of the leak/damage and who the at fault party could be. If the tenant is still living there, they will have an incentive to provide the correct information, so that the damage does not happen again. 
  2. Investigate the cause. If the damage bill is high, it may be advisable to pay for an investigative report, by a home assessor. Ensure you advise them to also report on the recovery prospect. 

 

  1. Tenant-related damage

These claims are for tenant-related issues, including accidental damage.  

They can be accidental damage, malicious damage or damage that’s deliberately caused but without malicious intent (e.g. hammering nails into a wall and damaging the wall). Malicious damage claims are difficult to recover on, but not impossible.  

Accidental damage could be as simple as a spillage on the carpet, but the resultant damage bill can sometimes be huge. 

How to recover the money? 

  1. Get the full story, from all tenants involved and also the insured. Ensure you know your facts, before you start the recovery process. You need to get it right at the start, so you are not wasting your time pursuing the wrong person. 
  2. Check the tenant to see if they have an insurance policy that will cover them. Lots of renters are now taking out their own insurance policy for these types of claims. 

 

  1. Fire/Fusion damage

Fire can be caused by an electrical fault or by the tenant leaving a fireplace lit, or a candle, for instance. Fusion is where an electric motor catches fire. Common ones include air condition units, fridges, freezers, ovens, stoves, dishwashers, washing machines, and dryers. 

How to recover the money? 

  1. Some of these claims can be large losses, so sometimes it will be prudent to get a forensic assessing report done. Again, don’t forget to brief the assessor to provide a report on possible recovery.  
  2. Many of these recoveries are over-looked, so it pays to do a closed case review on closed fire/fusion claims. You want to look at the first assessing report that gives you the cause of the fire/fusion and from this, you can deduct if there is a right of recovery against a person or company. 
  3. Information is key, so keep in contact with the insured and the tenant and ask as many questions as you can in regards to how the fire/fusion started and what were the contributing factors. 

 

  1. Glass breakage

Glass breakage can include claims for broken or damaged windows, shower screens, splash-backs, basins, and sinks. The recovery can arise from a tenant, tradesperson or even a neighbour-e.g. debris coming from a neighbouring property, damaging the glass of the insured’s premises. 

How to recover the money? 

  1. Look at the “how”? How did the incident arise? Then ask “Who”. Who is responsible? In most cases, you will find there is a right or recovery on these claims.
  2. Contact tradespersons involved. This is heavy work- attempting to find the person responsible, especially if it’s a new build as there will be many parties involved. Best handled by a recovery specialist. 

We hope these tips have been helpful. Debt Recoveries Australia specialise in insurance claims recoveries, including disputed matters, investigations, each bear own scenarios and closed case reviews. Please contact us to know more. 

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