Rental Property caught on Fire

[Stacie Meeker]

Words of wisdom in case this every happens to you:

1.  Before you file your insurance claim, contact a Public Insurance Adjuster

Not only will you get a higher claim paid for damages, but they will help you determine damages.  They will meet your insurance adjuster on site and do all the leg work for you.

In exchange, they will want 10% of the claim paid out to them.   But I think it's well worth the cost.  Quite frankly, since someone else told me about using a Public Adjuster, I plan to hire one for every insurance claim that I file against all of my properties.

2.  Be sure you understand in advance that your lender (if you still have a mortgage) will want to control the insurance money released to you if the claim is over $10,000.00.  I recommend hiring a General Contractor who will be sure that the communications between you, the bank and the sub-contractors go smoothly.  Less headaches for you.

3.  You can contact the City Fire Department for a full report on the cause of the fire.  Often times they can recommend a good company that will restore your property.

4.  Have the property secured including your outside A/C unit.  It will take some time for the insurance company, adjuster, Private Adjuster and Lender to make funds available to start the repair process.  We had the A/C unit secured with a cage and had the house boarded up to deter thieves and vandals from creating further damages to your property.

5.  Keep a positive attitude.  This type of property damage is very stressful, but once you spend the time putting all the right people together.  You will be able to better handle anything that comes up.  

6.  Most important to me, is to contact all of your insurance agents now.  Ask them to add "rent loss" to your policies.  I learned the hard way, that not all insurance policies are created equal.  

I hope this post has helped you.  Or will help you be better prepared in case a fire occurs at one of your rental properties.

[Chanté Owens]

Originally posted by @Stacie Meeker:

6.  Most important to me, is to contact all of your insurance agents now.  Ask them to add "rent loss" to your policies.  I learned the hard way, that not all insurance policies are created equal.  

I appreciated all of your points, and words of wisdom, but I specifically wanted to call this piece out (in bold). As a Commercial Insurance Broker, so often, people think you are trying to "pad" their insurance policy for more money by throwing in"unnecessary" items. While I will say there may be some brokers/agents who do this; in the vast majority of cases, if something is recommended for a policy, it's because: a. it is something that is optional for the policy, but is continually seen as a claims exposure, or b. the amount to add to your policy is minimal, but should you experience a loss, your personal payout could be significant if you didn't have that coverage.

As a brief example, a of commercial policies will have a nominal amount for building ordinance losses (link to a good definition of this coverage:

http://www.irmi.com/online/insurance-glossary/term...)

The reality is, if you own an apartment complex, and there is a loss that requires some updates to your property regarding ordinance; oftentimes they may require your ENTIRE property to have those updates. One loss that recently occurred was an insured who had a fire loss on their property, and their stairwell doors were required to be of a higher fire grade than they currently were, as well as some additional sprinklers, etc. This requirement required of ALL the buildings, not just the building that incurred the loss. Since the insured had only the minimal coverage limits on his policy for building ordinance he was out-of-pocket quite a bit of money to bring the other apartment buildings up to code.

This is just an example, but what I let my clients know is, if I recommend something it's not to pad the premium, but because it's a real exposure they may face, and given my past, extensive claims background, I am more sensitive to what losses ACTUALLY costs than a lot of others in my field. My general line is, "What is the maximum amount that you would want to pay out-of-pocket." If you have a cheap property that you got for 30k, and don't care if it burns to the ground, and don't want to pay that $500, $1000, etc premium, then that's up to you, as that's the cost you are willing to lose. Just my .02.

Thanks for this post, and sorry for your fire loss, but glad it was (relatively) a smooth process for you.