Insurance excess case study - fire

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We offer an independent and impartial resolution service for landlords, agents and tenants who are unable to reach an agreement on distributing the deposit when the tenancy ends.

Our Resolution Department Lead, Suzy Hershman, helps you to understand our approach in this case.

Deposit details

Deposit:                              £1,425.00

Disputed amount:             £500.00

What happened?

The tenant said:

• one evening they were in the lounge and left for a few minutes to go and make a cup of tea
• when they came back the candle, which was lit near an open window, had blown with the wind and set the curtain alight
• they should not have to pay anything for this as it was an unfortunate accident, and the landlord was covered by his insurance policy

The agent responded, saying:

• the fire caused a significant amount of damage to the property as well as the smell of smoke
• the extent of the damage meant the property was uninhabitable until the repairs could be organised and carried out
• while they, and the landlord understand the fire was an accident, the tenant caused the fire and the landlord has had to claim for the repairs on his insurance
• the landlord is reasonably only claiming the insurance policy excess and not the full repair costs, which is a minimal cost to the tenant

What evidence was provided?

Check-in report, check-out report, landlord insurance documents, communication, photographs

What was decided and why?

1. A tenant is responsible for returning the property in the same condition at the end of the tenancy as it was at the start, after making an allowance for fair wear and tear.
2. While the detail in the check-in report was less important than it would be in most other deposit adjudications, it did show that the property and contents were all in a good condition.
3. However, the photographs taken after the fire showed the extent of the differences and the extent of the fire damage.
4. Although accidental, the tenant was still responsible for damage caused during the tenancy.
5. Had the landlord not made a claim on their insurance, the whole deposit and more would have been needed to cover the cost of repairs, even allowing for some fair wear and tear.
6. The insurance documents and evidence of the claim made by the landlord in relation to the fire showed an excess of £500.00 was payable.
7. The adjudicator was satisfied that the landlord had opted for the most cost-effective solution, minimising the cost to the tenant, and the excess amount claimed was awarded in full.

How can you avoid this happening in future?

• No one can prevent accidents happening in our properties, but buildings insurance policies are fundamental for safe-guarding against them
• Insurance policies offer peace of mind and will be the most cost-effective way of making sure the property can be restored, whatever the extent of damage
• Tenants need to understand the consequences of using candles near to open windows and flammable contents, and leaving electrical items unattended when being used (such as toasters)
• Tenants will be responsible for causing damage in all circumstances – accidental or intentional – and for the costs for making good

It is vital to make sure you have landlord insurance in place so that you are protected against fire risk. Cover won’t stop damage from being caused, but it will provide peace of mind that you won’t be out of pocket for the cost of any repairs or rebuilds – and potentially the cost of lost rental income or temporarily rehousing tenants – in the event of a deliberate arson attack or an accidental fire.

Steve Barnes, Head of Broking at Total Landlord, offers his advice:

“Prevention is always best when it comes to fire. Make sure fire and smoke alarms are regularly tested and show tenants how to test them. Unfortunately we have seen an increase in arson claims, so always thoroughly reference check tenants. Of course, despite doing all you can to protect your property from fire, accidents sometimes happen and the costs of repairing fire damage can be very high. This is why landlords should make sure they have comprehensive landlord insurance cover in place.”

For any fire claim to be paid out, you’ll also need to make sure you are compliant with relevant fire safety regulations. Total Landlord, also powered by Total Property, has written an ultimate guide to fire safety for landlords for more information.

Is your rental property insured in the event of a fire? Find out more about mydeposits insurance partner, Total Landlord Insurance.