Landlords warned to seek specialist advice on cannabis claims

Landlords who discover tenants have been running illegal cannabis farms from rented premises need to seek professional help if insurers refuse claims for the damage caused, according to Claim Experts.

“What was once a sensational newspaper story is now becoming far more regular with Aviva reporting 92 cases in a year – that’s nearly two a week from one just one insurer,” said Richard Hanson-James, chairman of Claim Experts

With more police seizures of cannabis plants and claims rising, he said that property landlords need to be aware of the huge damage that can be caused to their properties should they fall victim to a cannabis growing scam.

Damage caused by cannabis factories can sometimes necessitate stripping property right back to bare brick with removal of plaster, wooden structures and wiring. Claims can reach six figures.

“As chartered adjusters who work for the policyholder rather than the insurer, we have been called in to help on similar claims, for example, where the insurer has refused to pay a claim citing the ‘reasonable care’ condition in the small print, ” said Hanson James.

He said that to throw out a claim using this condition the insurer has to establish that the client was “reckless” and that they knew of the risk but chose to accept it and took no adequate measures to avert it.

“In one case we helped to settle, a landlord’s claim had been refused on the basis he had failed to take up references and not made regular visits to the property.

“We made the point it was not usual to take up reference for university lets and we proved that he had undertaken visits but scaled them back when no problems were found. It was only when the cannabis farmers vanished without trace that the damage was discovered. In this case we were instrumental in securing a pay-out from the insurers of almost £20,000.”

He said other defences advanced by insurers to refuse or limit claims can be defeated. These include that to pay the claim would be contrary to public policy, that use of the property didn’t correspond to what was on the insurance application, and that the property owner should have declared at the beginning that other cannabis farms had been discovered in the area.

“These are all nonsense, but it’s not always easy for an affected owner to know how to combat them.”