Unhelpful Insurance Company

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Unhelpful Insurance Company

Postby alleygater » Tue Apr 29, 2014 2:13 pm

This is not quite a Landlord and Tenant problem but very similar. A property is owned by a family trust. Under the terms of the Trust a particular family member is allowed to to live in the property as long as she wishes, rent free, but is responsible for all maintenance/upkeep and buildings insurance. Trustees are two other relatives but relations between family members involved is acrimonious to say the least.

Trustees recently insisted occupying relative supply a copy of the building insurance and when eventually produced it was obvious it had only just been taken out (ie was not a renewal) indicating no insurance in place for several previous years. The insurance should be in the joint names of the relative and the Trustees. However relative seemingly delegated job of obtaining insurance to her partner and the Insurance Schedule names the partner as the main policy holder and the relative as secondary. No mention of Trustees at all. Schedule also says policy is based on property being owned outright by policy holders which of course it is not. In addition, in bold print, schedule says that if anything is incorrect the Insurance Co may cancel the policy / treat it as it never existed / reject any claim. Since the Trustees did not trust the relative to get the Schedule information corrected the Trustees took it upon themselves to notify the Insurance Co that the policyholders did not own the property and that the main policyholder did not have any insurable interest in the property. Correct information was provided to the Insurance Company to enable the Schedule to be amended and they were referred to Land Registry should they wish to independently verify the information.

The Insurance Co reply was that they only take instructions from their policyholders and cannot act on third party information. When pressed that their main policyholder could well have committed fraud (by taking out a policy when he has no insurable interest) they reluctantly agreed to contact their policy holders but have since refused to say anything further. They will not even say whether insurance is in place or whether the policy has been cancelled. The Trustees need to know this. If the insurance details have been corrected and the policy has been revalidated then presumably a new schedule will have been issued which the Trustees could press the relative to provide a copy. Relative not likely to volunteer any info and Trustees can hardly insist on something that may not exist. Alternatively if the policy has been cancelled then again the relative is not likely to volunteer this info either since she did not let on that she had not taken out any insurance at all for several previous years.

Is there any way of obliging the Insurance Co to say whether buildings insurance exists or not? Is there any buildings insurance central database which could be consulted (like there is for car insurance) or any other suggestions how the Trustees could establish whether or not buildings insurance exists on the property.
Alleygater
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Re: Unhelpful Insurance Company

Postby MacadamB53 » Tue Apr 29, 2014 3:48 pm

Hi alleygater,

The insurance should be in the joint names of the relative and the Trustees

does this not mean that they should be able to obtain a copy, and if not then no policy exists with them on it?

Kind regards, Mac
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Re: Unhelpful Insurance Company

Postby alleygater » Tue Apr 29, 2014 6:59 pm

Hi Mac
Thanks for response. Yes policy should indeed have been in the joint names of the occupying relative and the Trustees. Unfortunately it would seem that relative delegated her partner to arrange the insurance and he totally ignored this requirement and made himself the main policyholder and the relative the secondary policyholder. No mention of Trustees at all.

To be fair partner may not have been aware of this requirement since he is not a party to the family trust arrangements. The relative should have known but may not have told partner - whether by oversight or deliberately is not known. Net result the same though – the only Insurance Schedule seen by the Trustees is in error. In addition can anyone definitely confirm that it is illegal / unlawful / not permissible or whatever for someone who does not have any financial interest / insurable interest in a property to take out buildings insurance and be a policyholder on that property.

Trustees have explained the true situation to Insurance Co and Insurance Co say they have contacted their policy holders but will not tell Trustees what transpired leaving Trustees totally in the dark whether any valid insurance is in place or not. Any suggestions to resolve would be welcome.
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Re: Unhelpful Insurance Company

Postby MacadamB53 » Tue Apr 29, 2014 7:06 pm

Hi alleygater,

you've lost me.

you mention the terms stipulate any insurance must have trustees named.

leaving Trustees totally in the dark whether any valid insurance is in place or not

there might be a valid policy but it doesn't meet the trust terms so...

Kind regards, Mac
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Re: Unhelpful Insurance Company

Postby Janieb » Tue Apr 29, 2014 7:32 pm

I live in a house under very similar circumstances. As far as things are set out where I'm concerned the house is exactly as if I own it until I die, but I can't sell it and have to keep it it good order.

The insurance part of it is that I have to provide buildings insurance in the trustees names but the contents insurance is in mine as I own the furniture. If I do not abide by the conditions of the trust I could lose my home, so it rather depends on the wording of the trust agreement as to what the OP's options are.

To ensure I don't get trouble from the trustees I send them copies of the insurance documents when renewed and copies of invoices for any work done to the fabric of the building and garden eg new bathroom, fences, shed etc.
"I prefer rogues to imbeciles, because they sometimes take a rest" Alexandre Dumas (fils)
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Re: Unhelpful Insurance Company

Postby alleygater » Thu May 08, 2014 3:19 pm

Hi Janieb.
Interesting to hear that the situation Trustees are trying their best to administer is not unique. You though clearly abide by the trust deed provisions and the system works OK. Unfortunately it does not work when the occupier does everything they can to avoid their obligations compounded by the occupier and Trustees all being members of same family. Normal family relationships have degenerated into all out hostilities.

Hi Mac
Have tried to explain situation as best I can. Insurance should indeed have been taken out in the joint names of occupying relative and Trustees but it was not. Occupying relative delegated taking out insurance to her partner and consequently policy schedule names partner as main policyholder and occupying relative as second policyholder. No mention of Trustees at all. Partner also told insurance co untruths about the property ownership which also appear on the schedule.
Trustees advised insurance co of correct details with substantiation. Insurance co initially insisted they could not act on third party information but then reluctantly agreed to contact their policyholders. Since then though they have refused to tell the Trustees of the outcome nor will the occupying relative. Was hoping there was some other way of finding out whether the insurance schedule details had been corrected and schedule reissued or whether the insurers had merely cancelled the policy due to them being given false information. Seems only way of getting to bottom of situation will have to involve solicitors and yet further family hostility.

Hi Anyone
Still trying to get clarification on the general principle of whether someone can take out insurance on a property in which they do not have any financial interest. Common sense says this should not be possible otherwise it rather encourages arson but does being a policyholder in such circumstances constitute an illegal act or is it a fraud (or a potential fraud) or what and what actions would an insurance co normally be expected to take in such circumstances?

Alleygater
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Re: Unhelpful Insurance Company

Postby MacadamB53 » Thu May 08, 2014 4:20 pm

Hi alleygater,

...Since then though they have refused to tell the Trustees of the outcome...

maybe it's the outcome I'm getting confused about, because if the outcome was for the trustees to be included on a policy then by refusing to communicate with the trustees does this not mean they're not yet on a policy???

Kind regards, Mac
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