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Updated over 10 years ago, 09/10/2014
Tenant Damages / Insurance Question (USAA)
My husband and I have one rental property in South Carolina - our previous home that we were unable to sell. We live in Tennessee, and it has been managed for the past 4 years by a neighbor/friend. The tenants (our second set of tenants) that were just evicted were there for 20 months. Our neighbor did regular check-ins, and made repairs as needed. His last check was in March, and things were in good shape. However, that is also the time that the wife moved out. They stopped paying in June, and we had them evicted by July 3rd. The place was completely trashed (some clear vandalism - neighbors saw the teenage son throwing concrete blocks into the pool, urinated on the floor, wrote on walls, and smeared feces on the wall). Other things are less clear - siding torn off of the house, all screens and blinds torn apart, all appliances ravaged, wood floors smashed. There are also things like a cockroach infestation (again, not present in March), cabinets needing to be replaced due to sink leakage that we were never told about. We have a lease and rental property insurance coverage.
What should we expect out of insurance? We have USAA Rental Property Insurance. This obviously goes way beyond normal wear and tear, but some of it is also not technically vandalism.
Also, I did check on the renters with a previous landlord before they moved in, but didn't do a background check. However, I don't think we could have planned on this, because it seems to be directly related to the wife moving out. Either way, we are definitely beating ourselves up for not doing a more formal check.
Ask the neighbor to testify under oath what they saw and then the police might get to involve.
Joe Gore
Thanks Joe.
He called the police, and they came out to take a statement, and make a report, but then said that they could not file the report, because the tenants were still living there at the time of the damage. I am now working on calling the magistrate instead.
Regarding a lawsuit, we are also working on that, but money is (obviously) tight with our current situation. We now know that SC consumer laws do not allow for wage garnishments, so the lawsuit will be primarily to give us warm fuzzies, rather than money, so it's a lower priority at this time...unless, of course, it helps our case with USAA?
First of all, stop beating yourself up. They were good tenants for 20 months, so your screening process worked as well as it possibly could have. You managed the property well and protected yourself the best ways you knew how.
Did you happen to take pictures during the course of their occupancy? Especially after getting the eviction order? If so, it could make it easier to show the extent of their vandalism.
Have you considered suing them for the extensive property damage they intentionally caused? After you win, you could garnish some wages and/or put a lien on some assets. Or hire a judgment recovery company to do it for you. Either way, the judgment will cause them headaches and could help compensate you for a few of yours.
Thanks Barry - I really appreciate you saying that.
We were absolutely going to sue them until we found out that SC does not do wage garnishment. They don't own anything of real value, so we likely wouldn't get anything out of them. However, we do plan to take legal action, if only to make their lives miserable for the next 10 years that the judgement is good for.
Unfortunately, our neighbor did not take pictures during his visits, nor did he do so after the eviction was filed. USAA has been so good to us over the years, and I have to hope that they will continue to do so. Also, I will have to hope that common sense prevails, and that, if they were seen throwing bricks into the pool, and urinated on the carpets, etc, it follows that some of the other things were vandalism as well.
Tiffany,
Sorry to hear that happened to you. What city in SC? Columbia? Are you guys in the Army? Were you planning on taking a trip out to the home to manage getting things fixed and rent-ready again or will all of it be from out of state? Have you called USAA yet to see what they will cover in the claim?
I would be interested to hear if USAA does get involved in this. My guess is, they will not. We had some tenant-related damage (leak that went unreported to us for a month that caused the ceiling to collapse) and they said they would not cover it becausse the leak had been going on so long. that our tenants had not reported it to us was inconsequential.
Scott, it's in Greenville area (Simpsonville to be exact). The sheriff's deputy that came out said he had never seen anything like that in that part of the county - lucky us.
My husband was in the Army previous to the time we lived in SC.
We are not sure if we are going to take a trip there or not. My husband is planning on it, but he owns a business, and it's hard for him to get away, and we have a 7 month old. We're going to talk to our saint of a neighbor tonight to see what the next steps are.
We have called USAA, and they sent out an independent assessor. Originally, speaking with USAA, we were very positive, and they said it sounded like they would cover most of the damage. Then the assessor said that 85% looked like "wear and tear". This is when I really got worried. He hasn't reported back to USAA yet, so we are waiting for that right now.
Tamara, that's horrible. We know they will have to get involved with part of it, but it remains to be seen what exactly they will cover.
I have heard of other insurers paying for this type of damage, and I consider USAA to be the best of the best, so I just have to hope and pray.
Sometimes tenants just go bad. That is just the way it is. Screening usually gets rid of problem tenants, but as you know people change and you can't predict that.
I have written on here a couple of times about my problems with USAA. Lets put it this way there are a lot of other insurance companies I would use before I would ever use them again. I strongly suggest you keep harassing them until you get some satisfaction. I'd try twitter and facebook to put some pressure on them. My neighbor spent well over two years writing letters and making phone calls before they finally decided to replace his roof. In the end he has the newest roof in the neighborhood, because the rest of us had our roofs replaced years earlier by our insurance companies even though all were damaged in the same storm.
Cal., that's great advice!
We haven't had issues with them on other things, but I have NO idea how this will go. I will keep your advice in mind - hoping for the best, and preparing for the worst.
This sounds like substantial property damage, so USAA should get involved. You should file a claim ASAP and get the adjuster out there. If the damage is into the tens of thousands of dollars, you might also consult with a good public adjuster.
Normally, your insurance company should pay for all covered losses. They will also have the right to subrogate against your tenants (go after them for damages) and collect what they can. You can expect to see a rate increase as a result of this when your policy renews, so you might start looking for a quality insurance broker well ahead of your renewal.
The key difference here is that the leak is a gradual event. Failing to notify you might make your tenant technically liable for the damage, but it doesn't make the leak itself a covered cause of loss.
#2 Contractors Contributor
- Severna Park, MD
Go for the judgement , my state allows you to renew the judgement after 10 years . Now if they ever hit the lottery , come into cash , aquire property , you may get paid. It will also show up when they apply for credit haunting them for a long time.
Thanks Eric and Matthew. I appreciate your advice so much!
As an update, we got our first estimate back to fix the repairs. It was $30k for all of the damages that they caused. I also found out that they stole almost all of the towel racks and toilet paper dispensers, which only adds to our claim that it was vandalism. We still haven't heard back from USAA following the adjuster's visit, so we're just waiting to hear back.
Most insurance companies will want three estimates, and some insurance companies will have their people go out and give an estimate and just make sure your GC did not jack the rates because they could deny the claim or pay your base on what their estimate was.
Joe Gore
Thanks Joe! We understand- just wanted to share that the first estimate was quite significant, somewhat in response to Eric's comment above. USAA, in our prior experience, requires 2 estimates.
