Landlords who claimed their property was marred by foul odors due to their tenants cooking “strong curry” will not be compensated for their losses after losing an appeal dispute.
The complainants filed a claim after they “noticed an odor” in the home after their tenants vacated it.
An IAG assessor who visited the property on February 11 last year noticed a “strong smell of curry” throughout the house and interior decorations but said it was caused by an accident.
The policyholders said they had to complete restoration works costing more than $12,000 before they could return to the property, due to the “uninhabitable” smell. They also said the smell aggravated one of the complainant’s allergies.
The insurer rejected the claim, saying it did not fit the policy’s criteria of accidental loss or damage caused by “an accidental act, or an unforeseen and uncontrollable incident”.
It also said the damage could not be defined as a “malicious act,” which is also covered by the policy, because tenants have permission to cook at home.
The Australian Financial Complaints Authority (AFCA) upheld the insurer’s decision, saying the alleged damage was not covered by the policy.
“There is no dispute that the alleged damage was due to the tenants’ cooking of food. I do not consider that the cooking was an accidental act or an unexpected and uncontrollable incident,” AFCA said.
“The tenants have permission to cook food on the property so the act of cooking does not meet the definition of a willful or intentional act under the definition in the malicious acts section of the policy.”
The decision also dismissed the complainant’s argument that the policy covers losses caused by the tenant’s negligence, carelessness, poor housekeeping or unsanitary living, which it said were not foreseeable.
“As part of the investigation of the claim, the complainants provided a routine inspection report from the real estate agent managing the property.
“In that report the real estate agent had no issues with the cleanliness of the property. Nor did it mention any odors in the property.”
AFCA said it would be unfair to ask IAG to pay for the claim when it was not covered by the policy.
“While I understand that the complainants will be disappointed with the outcome, the insurer has complied with the terms and conditions of the claim denial policy,” AFCA said.
Click here for the ruling.
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