Tenant slips and breaks the toilet by falling onto it. Water floods the place. She doesn’t know how to turn the water off. Whose insurance – ultimately who is responsible to fix the damage?
It looks like the Tenant was negligent. If so, then the Tenant is responsible for the damage. Assuming that they have Third Party liability insurance, then, their insurer will pay the entire claim without deduction.
It is also likely that the Landlord will have First Party insurance. If they applied to their own insurer, then, that insurance company would pay the claim in full subject to the application of the deductible.
The Landlord’s insurer could sue the Tenant under the right of subrogation for the entire claim. The Tenant’s insurer would be responsible for this entire payment.
There is a very interesting issue here which is coverage for the Tenant directly under the Landlord’s policy. The Tenant could:
1) be named as an additional named insured or
2) there could be a waiver of subrogation as against the Tenant.
Either would work. After all, whose rent is going towards the Landlord’s ability to pay the insurance premium?
This way, the claim gets paid and we eliminate lawsuits ( and hard feelings) between the Landlord and Tenant.
Brian Madigan LL.B., Broker