WA Cash Settlement Calculation for Landlord Insurance

Discussion in 'Insurance Law Forum' started by Marcus Lim, 20 February 2018.

  1. Marcus Lim

    Marcus Lim Member

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    My tenanted rental property was recently burnt in a accidental fire. My landlord insurance policy (ANZ/QBE), has offered us a cash settlement of $154k. The policy cover is

    Building $205,450
    Contents $14,000
    Rental Loss $52,000 (12 months)

    Both builders assigned by the insurance company has quoted approx. $195k to fix the property, and I suspect the contents will be above the $14k. There is approx. $5-$8k of items mis-quoted/not included, that will need to be added to the builders quote. This will make the insurance claim close to the $205,450 insured value.

    The insurance assessor said that with a cash settlement, the builders profit is deducted (?) plus other items like temporary fence, idles license etc...., and they have given us a offer of $154K......that doesn't seem fair, as the value to get the property back to the market is probably more then the insured value as we will need to redo the garden etc...as this isn't included in the insurance policy, and we had not access to water/electricity and the summer hear has killed most of the plants.

    I would appreciate some clarification, and direction to understand this.

    Thank you in advance.
     
  2. Zerojay

    Zerojay Well-Known Member

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    Based on the current PDS on the ANZ website, QBE can only settle the claim 2 ways - repair or pay the cost to repair. (pages 43 - 45) I cannot see anywhere that they have the contractual right to deduct builder's margin etc from the cost of repair. So you should be entitled to $195000 + $14000 + loss of rent up till repairs completed or max 12 months. Can't understand why they did not authorise repairs- did you request a cash settlement? Page 49 of the PDS sets out how to lodge a complaint with QBE.

    I do not give legal advice, just an opinion based on 20 years experience working for an insurance company.
     
  3. Marcus Lim

    Marcus Lim Member

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    Thank you for your response. Yes, when the builders quote came back close to the sum insured, the option of a cash settlement was brought up, and I then requested for a cash settlement so that I can be a owner/builder and project manage the repair. I’m in construction and a chippy by trade. This request seems to instigate the insurance company to create these deductions :-(



    you
     
  4. Zerojay

    Zerojay Well-Known Member

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    They are thinking that you should not be able to make a profit from your loss which is an insurance fundamental principle. However the policy wording is binding on them to pay the full repair cost. If they wanted to be able to apply conditions and deductions to cash settlements they should have included these in the wording.
     
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