Landlords are liable for damage to houses accidentally caused by their tenants, according to a Court of Appeal decision in a long-running insurance case.
The ruling may mean that insurance premiums will go up for landlords, and tenants can get rid of personal liabilities policies with tenants being covered whether or not they have insurance.
AMI insurance has been fighting in the courts since March 2009 saying it shouldn't be responsible for a $216,413 repair bill for a house insured that needed to be gutted after a fire.
The fire started when tenants left a pot of oil unattended on their kitchen stove, on a high heat.
AMI insurance acted on the landlord's behalf, saying tenants Kenji and Teiko Osaki should have been liable for the damages, and they won in the Tenancy Tribunal.
But the decision was reversed in the District Court and upheld in the High Court that the Osakis were not liable.
The Osakis argued the same should apply to residential tenants. The Court of Appeal agreed.