A man whose property was “smashed up” by a paying guest was further upset when his insurer applied multiple excesses and provided no loss of rent payment under a landlord’s house insurance policy. In his complaint to the IFSO Scheme, Mr A said he was forced to accept the claim settlement and said he felt “bullied” into agreeing to 4 separate excesses for each of the 4 rooms damaged, even though it was one event and the damage occurred over one night.
Mr A held insurance on his property that he rented out to AirBnB guests. In April 2021, he made a claim for damage to the property, which was caused deliberately by a guest. He told the insurer that “a guest who turned out to be some sort of criminal, smashed the place up one night while drunk”.
The insurer accepted the claim. However, a dispute arose with Mr A about the 4 excesses applied of $500 for each of the 4 rooms in which the damage occurred. The insurer offered $7,504.44 in settlement of the claim, rather than the $22,500 he expected for the cost to repair the damage less one excess and 8 months’ loss of rent. The insurer said it had no obligation to pay loss of rent, because it didn’t know Mr A was renting rooms of the house out to paying guests through AirBnB, which would have needed a commercial policy.
Having reviewed the file, the IFSO Scheme believed Mr A’s version of how the damage occurred was consistent with the damage described by the loss adjuster. However, as the damage was caused deliberately, an additional excess of $500 also applied, so there was a total excess payable of $1,000.
Following the IFSO Scheme’s discussions with the insurer, it accepted that there were unreasonable delays in settling the claim. Therefore, it offered to settle the claim for an additional $3,484, reversing the application of multiple excesses and making a goodwill payment. Mr A agreed to accept this amount in full and final settlement of the claim and the complaint.
