The following is a query a reader submitted to the Irish Times which Winters MD, Enda Mc Guane answered this week. Enda is a chartered planning and development surveyor and a member of the Society of Chartered Surveyors Ireland, scsi.ie.
Most tenants are unaware of their obligation to have their own insurance
Q. We are renting an apartment for which we wish to obtain a tenant’s or contents insurance policy, which in addition to contents would also cover occupier’s liability. We have tried both insurance brokers and individual insurance companies but without success. It seems that only owner or landlord policies will cover occupier’s liability.
Can you offer any advice on where we could look, or if occupier’s liability is normally covered by a policy held by the owner of the apartment or the landlord?
First of all, it’s great to see someone taking such a prudent approach to protecting themselves and their belongings. Many tenants are completely unaware of the requirement for insurance cover as an occupant and discover that they are not protected only when something goes wrong.
I will briefly summarise the various insurance covers that apply before focusing on your specific query. Assuming that you live in an apartment within a larger block, there will be three insurance policies in operation to cover the three parties.
First, the owners management company (OMC) is responsible for the communal areas of the building, essentially the corridors, gardens and external walls, etc. This entity is required to put insurance in place for all property owners, which among other things covers fire and public liability. Essentially everything outside your apartment door. Good block policies should also include cover for fire brigade call-out charges, as well as the provision of alternative accommodation for owners and loss of rent cover for landlords in the event of significant damage and evacuation.
Second, your landlord will have insurance on the apartment internal area and should have insurance cover in place to cover all their fixtures and fittings and their general obligations as a landlord. This should include the cost of providing a tenant with alternative accommodation in the event of significant damage. Landlords who don’t take out a specific landlord insurance policy and who rely on a standard home insurance policy will discover this is to their cost when they try to make a claim: they are not covered.
Third, there is yourself as the tenant. While it is true that a rental property is insured by the owner, the destruction or loss of your personal belongings are not. However, as you have also identified, there are other risks that renters need to worry about. A typical renter’s insurance policy should cover your possessions against losses arising from fire, smoke, theft, vandalism, explosion, water damage (excluding floods), etc. It should also cover damages and costs in the event that visitors are injured in your apartment or elsewhere by you, your pet or a family member living with you. This includes any legal defence expenses if you are taken to court.
Depending on the policy, it may cover additional living expenses should you be unable to live in your apartment. However, as highlighted above, given that there may be three forms of cover in existence if an event occurs which causes damage, loss adjusters appointed by the various insurance providers will have to address which cover applies.
If you have any possessions of particularly high value, such as art or jewellery, you may want to add an additional cover to the standard renter’s insurance policy and you will also need to check if your policy covers the cash value (depreciated value) or the replacement cost (purchase cost) and what limits apply. If you are living with a roommate or domestic partner, you should inquire what implications this has for the policy.
You seem particularly concerned about what you term occupier liability. Obviously, when it comes to insurance, the “devil is in the detail” and there are specific definitions of cover and this may be the source of your frustration.
Public liability cover is available on landlord policies, while personal liability is available on tenant insurance policies. In simple terms, the latter covers you as the individual and the former covers the property owner in their commercial role as landlord.
When engaging with your insurance provider, I believe you need to review personal liability cover and establish if this gives you the protection you require. As with all insurance matters, it’s important to get good advice from an appropriate insurance professional to ensure that you have appropriate levels of cover based on the value of your possessions and needs.