Consumer groups have again alleged that landlord insurers are “unfairly” demanding tenants pay for their landlords’ insurance claims, after first flagging the problem last month.

Last week WEstjustice and Choice provided more examples of renters who have been served letters from lawyers and debt collectors acting on behalf of insurers, notifying them they are responsible for accidental damage caused.

They have also launched a campaign to ban insurers going after tenants for debts they don’t owe.

The consumer advocates say insurers have provided no evidence of tenants’ liability and that the response from the insurance industry “isn’t good enough” because renters are not their clients to begin with.

“The big challenge with this problem is that the person who rents isn't a customer of an insurer, they’re a target,” Choice Director of Campaigns and Communications Erin Turner said.

“These cases put unfair pressure on anyone receiving a bill. You’re being asked to prove you don’t owe the debt or to pay up.”

The Australian Securities and Investments Commission says it has received a “complaint” from Choice and that it is “considering the issue”.

WEstjustice says the time has come for reforms to bring Australia in line with other jurisdictions such as New Zealand where there are greater protections for tenants.

“We think that the protections for tenants should be changed,” Acting Legal Director Matthew Martin told insuranceNEWS.com.au. “The Insurance Contracts Act should mirror the legislation in New Zealand to protect renters and treat renters as third-party beneficiaries under a landlord insurance policy.”

QBE, one the insurers named in the investigations, says it works within the regulatory framework set out for recoveries across the industry and that it is aligned with the General Insurance Code of Practice.

“We very much welcome feedback on our recovery processes and are happy to review individual cases through our official channels,” QBE said.

insuranceNEWS.com.au understands the matter raised by the consumer advocates is not within the jurisdiction of the Australian Financial Complaints Authority. This is because the “customer” relationship in landlord insurance is between the landlord and the insurer.

See ANALYSIS.