Liability anomaly

Our Experts Answer:

Thank you for your question and good on you for your honesty with your landlord.

The perceived anomaly here is due to the recent precedent under "Holler vs Osaki" and the implications this has had on the Residential Tenancies Act whereby you would need to have intentionally damaged your landlords property to be liable. This decision is currently under appeal and it is widely believed that the Court of Appeal will reverse the decision - indeed many Insurers are holding off recovery action against tenants until this appeal is heard. Up until that decision, a tenant would have been liable for damage to the Landlord’s property caused by the negligence of tenant.

The other aspect to mention is that where a tenant and a landlord are both insured there is an agreement between most major Insurers called the "Standstill Agreement" whereby losses lie where they fall. Additionally, in your case, both AMI and NZI are owned by the same parent company, IAG, so recovery against AMI by NZI may be redundant.