Navigating Tenant Damage in Strata Insurance

Our latest video highlights the scope of coverage provided by strata insurance policies. When a tenant inflicts damage to the property covered by the policy, the insurer is responsible for repairing the damage. In such cases, the insurer may pursue a recovery against the tenant at the end of the claim to recoup the costs of repairs.

It's worth noting that tenants with their own Contents Insurance might find coverage for such damages within their policy under the public liability section, which is designed to cover liability for damage to others property. However, if tenants lack this coverage, they may be required to reimburse the insurer for the expenses incurred due to the damage.

One key consideration is the insurer's approach to recovery. While insurers might have previously been more aggressive in pursuing recoveries from tenants, recent trends indicate a more lenient stance. Insurers may be reluctant to seek recovery from tenants due to concerns and complaints regarding this practice.

Suppose the insurer successfully recovers funds from the tenant. In that case, it's important to understand that this will manifest as a zero-dollar claim on the policy. As a result, the policyholder should receive a refund for the excess paid. As a result of apprehensions and grievances surrounding this procedure, policyholders should be ready for the potential that insurers might abstain from seeking reimbursement owing to the concerns and complaints about this practice.

There is also the scenario where a property owner grapples with significant damages caused by tenants over an extended period. In such cases, the nature of the damages becomes crucial. Insurers typically apply one excess per event, meaning that individual damages—such as holes in walls, kitchen burns, and broken windows—will be treated as separate events, each attracting its own excess. It's essential to recognise that strata insurance isn't designed to cover instances of poor tenant behaviour - that's what rental bonds are meant to address.

Strata Insurance Solutions' offers valuable insights into tenant-caused damages within strata insurance. From coverage considerations to recovery practices and excess implications, property owners gain a clearer understanding of how strata insurance addresses tenant-inflicted harm.  For comprehensive guidance on strata insurance and to stay updated on valuable insights, follow Strata Insurance Solutions on YouTube and LinkedIn.