LawAnswers.com.au - Australia's #1 Legal Community

LawAnswers.com.au is a community of 10,000+ Australians, just like you, helping each other.
Ask a question, respond to a question and better understand the law today!
Join us, it only takes a minute:

Vero Landlord Insurance Claim Rejected - What Can I Do?

Discussion in 'Insurance Law Forum' started by Lawquestions, 25 July 2014.

  1. Lawquestions

    Lawquestions Active Member

    Joined:
    25 July 2014
    Messages:
    6
    Likes Received:
    0
    Hi
    I have an investment property that underwent 3 months of home owners warranty insurance building works. The insurer's (Vero) builder said that the unit was habitable and hence the tenants were not relocated. After the first week, the tenants moved out and I lost AUD $12,000 in rent plus reduced rent for the prior month.

    Then when the building works were finally completed, it took me another 2 months to rent the unit out, another AUD $8,000 in lost rent. I am unable to claim on my Landlord Insurance and Vero Insurance will not compensate me.

    Is there anything I can do?

    Regards.
     
  2. Michael T

    Michael T Well-Known Member

    Joined:
    9 April 2014
    Messages:
    151
    Likes Received:
    22
    Hi @Lawquestions
    What reason/s has Vero Insurance given for why they won't compensate you? Have you triple checked your landlord insurance policy for what's covered and what's not covered?
     
    Worldly1 likes this.
  3. Lawquestions

    Lawquestions Active Member

    Joined:
    25 July 2014
    Messages:
    6
    Likes Received:
    0
    Hi Michael T,

    Thank you for your response.

    1. Vero via the builder always maintained that the unit would be "habitable" during the Home Owner's Warranty Insurance building works.
    However, from quite a number of photos that I have taken it was clearly not "habitable". The glass folding doors on the whole southern side were removed and the unit was boarded up. The carpet was rolled up and left in the kitchen area. There was stuff everywhere in the lounge room.
    Not to mention the daily works of ripping up the tiles on the balcony and replacing them.
    My tenant at the time was a young family and the lady was a "stay at home" mum with a 2 year old boy.

    2. Yes have sent in claim to Terri Scheer and they do not cover loss of rent for building works.

    Any other assistance you can offer would be greatly appreciated.

    Thanks
    Lawquestions
     
  4. Sarah J

    Sarah J Well-Known Member

    Joined:
    16 July 2014
    Messages:
    1,314
    Likes Received:
    243
    Hi Lawquestions,

    If you have a dispute with an insurance/finance institution such as Vero, you may refer the matter to the Financial Ombudsman Services. They are a free service that offers information and may assist with dispute resolution between consumers and insurance companies. It is worth giving them a call and asking them if you have any grounds to claim under your policy.
     
    Lawquestions likes this.
  5. Lawquestions

    Lawquestions Active Member

    Joined:
    25 July 2014
    Messages:
    6
    Likes Received:
    0
    Thank you so very much for your suggestion Sarah J.
    I have submitted a claim to them and will await the outcome.
    Your help is very much appreciated.
    Regards
    Lawquestions
     
  6. Lawquestions

    Lawquestions Active Member

    Joined:
    25 July 2014
    Messages:
    6
    Likes Received:
    0
    Recent remedial building work that was carried out in the period from January to June 2014, resulted in me, as the owner of Unit X, losing rent, for a period of five months and 19 days, in the total sum of $22,183.90 The extent of the building work was such that the unit was rendered uninhabitable and as a consequence the tenants abandoned the unit bringing the tenancy to an end.

    I asked that the Owners Corporation consider authorising me to take action, on its behalf, under the Home Warranty Insurance Policy, against the insurance company, Vero, seeking to recover the loss of rental, and authorise me to file an application and represent the Owners Corporation before the NSW Civil and Administrative Tribunal (NCAT). I was prepared to indemnify the Owners Corporation in relation to any costs that may be incurred in pursuing such application.

    In its Residential Construction Warranty Insurance Policy Vero stipulated that it would pay, subject to the terms of the policy, including the exclusions, loss or damage (not recoverable from the building company because of insolvency), arising from a breach of statutory warranty. Vero has acknowledged that the building company breached many statutory warranties; and as a consequence approved remedial work to the unit block in the sum of almost $300,000.

    Clause 45 the Home Building Regulation 1997 (since repealed although the relevant regulation) related to limitations on liability and cover of the insurance company. Sub-Clause (1)(k)(ix) the regulation provided that the insurance company MAY exclude a claim for loss or damage resulting (inter alia) from, and I quote:

    'consequential loss, including, without limitation, loss of rent or other income, loss of enjoyment, loss of business opportunity, inconvenience or distress.'

    It was as a consequence of the impact of the remedial building work, rendering the unit uninhabitable, that the tenants vacated the unit premises, resulting in my loss of rental income.

    In its exclusion clause in the insurance policy Vero specifically excludes the areas in which it would not pay for loss or damage arising from a breach of statutory warranty, but the policy makes no provision for the exclusion of payment for 'consequential loss, including, without limitation, loss of rent or other income'.

    Clause 45 of the Regulation gave the insurance company statutory power to exclude, in its discretion, the operation of this sub-clause from its policy, but it did not do so.

    By not excluding the consequential loss of rent from its obligation to pay for loss or damage arising from a builders breach of statutory warranty, it is contended that the insurance company has an obligation under its policy to pay loss or damage (to the Owners Corporation for payment to the unit owner) for such consequential loss of rent in the amount of $22,183.90.

    It is illogical for Vero to deny liability under its policy on the basis that if consequential loss of rent was not specifically included in its policy, then consequential loss of rent was excluded.
    This is the response I received from Vero
    In your email, you are seeking compensation for loss of rental income for your lot whilst rectification works were undertaken.
    Upon review of the correspondence and the Policy wording, I provide the following response.
    As you are aware, should the property have been required to be vacated during the rectification works, the Policy covers the cost of alternative accommodation, as well as the costs associated with removal and storage. The tenants would have been provided with accommodation at no cost to them (should this have been required), and therefore there would have been no need for any reduction or waiving of rent during this period. On this basis, Vero is not required to cover any loss of rent, as this is a matter between yourself and the tenant.
    Furthermore, in the absence of Policy wording to indicate that the Policy intends to cover consequential loss of the kind you are seeking, it is maintained that there is no coverage under the Policy for loss of rent and reduced rental income.
    Please be advised the Financial Ombudsman Service do not have jurisdiction to undertake a dispute review for Home Warranty Matters.You have the right to seek a review of this decision on your insurance claim by lodging an application with the NSW Civil and Administrative Tribunal (NCAT). Any such applicationmust be made within 45 days from the date you receive this decision letter.
    This is the response I received from a Owners Corporation Committee Member
    A committee member has advised that the Owners Corporation are not responsible for a unit holder’s loss of rent during the building works and that I would need to spend money on a lawyer to sue the Insurer’s builder for misleading information and reliance on the “unit being habitable during the building works” via Trade Practices.
    Any help with this matter would be greatly appreciated.
     
  7. Michael T

    Michael T Well-Known Member

    Joined:
    9 April 2014
    Messages:
    151
    Likes Received:
    22
    Hi Lawquestions,
    Unfortunately if the loss is not covered by your insurance policy, then its unlikely that you'll be able to successfully claim that they should cover it.

    The NSW Government page "Complaints about insurance company decisions" sets out your options to challenge the insurance company's decision.
     
  8. Dalem

    Dalem Member

    Joined:
    1 December 2014
    Messages:
    1
    Likes Received:
    0
    Hi Lawquestion,

    did vero advise you when you first contacted them that your policy only covers the cost of replacement accommodation and moving etc? If they didn't, they should be still liable. If your car insurance includes a replacement car, and you fail to get them to pay for it, you can claim all expenses if you pay for the replacement car yourself. So the monies that your ex-tennant has laid out for replacement accommodation are claimable under your policy - as I read it.

    Dale
     
  9. Sarah J

    Sarah J Well-Known Member

    Joined:
    16 July 2014
    Messages:
    1,314
    Likes Received:
    243
    Hi Lawquestions,

    I note that it has been a while since hearing back from you. How did it go with the Financial Ombudsman? Any updates on your matter against Vero?
     
  10. Geoff

    Geoff Active Member

    Joined:
    19 June 2016
    Messages:
    7
    Likes Received:
    0
    Bring this one back to the top.

    I am currently in almost exactly the same position with the same company. My loss is currently about $20,000

    It would be really great if anyone to provide further help.

    My landlord insurer has declined my claim as they see no "occurrence" that triggers my policy. The builders, contracted by the owners corporation, will not answer any questions related to my claim for loss of rent.

    I do not have a direct contact with Vero as it is the owners corporation who have authourised the work. The owners corp deny any liability. I have submitted a claim to the owners corp insurer which was rejected, as they consider the unit habitable, that claim is now with the FOS.

    Additional -

    My tenant, who has now left received a determination from the rental tribunal and received a rental credit of about $5000 (she left as soon as that was exhausted. Immediate it was vacated the builder removed all windows and rear sliding door to bedroom.

    The scaffolding for the works to the multi story building is sitting on my courtyard, this was placed there without reference to me. Owners corp says they did not approved , builder says they have the right, Vero and contract co ordinator will not reply to my questions regarding placement. I consider the whole unit to effectively be a worksite.

    Major works still need to be done to the balcony, carpets to be replaced, doors and windows to be replaced, bathroom to be completely retiled and work will probably not be finished until August 2016 (work started when scaffold was erected in April 2015)

    My agent advises they cannot let the unit in its condition. The unit is 5 years old.
     

Share This Page

Loading...