Insurance Claim against me

[Austin Tam]

I had my property manager tear down a garage on one of my properties last year. In the process, the contractor damaged part of the neighbor's fence.  The neighbor then filed a claim with their insurance company, Nationwide, who subsequently reached out to me to collect damages. I gave them the contact info for the vendor that did the job and was told they would pursue the contractor.  It's been a year and now Nationwide is coming back to me to collect the balance since the contractor won't pay up.  Is anyone familiar with this situation?  

[John Underwood]

I would consult with an attorney. 
Did the property manager pick and hire the contractor or did you pay the contractor directly?
If the PM paid them tell Nationwide you didn't do the damage and you didn't even hire the contractor.

[Austin Tam]

Originally posted by @John Underwood:

I would consult with an attorney. 
Did the property manager pick and hire the contractor or did you pay the contractor directly?
If the PM paid them tell Nationwide you didn't do the damage and you didn't even hire the contractor.

This was my line of thinking as well.  I paid my property manager for a bunch of work, the garage tear down among it, and the property manager then chose and hired the contractors. 

[Sam Shueh]

A lawyer charges $350 an hour minimum several hours and can be costly. A court is where it is decided. If it is a few 100 bucks I will avoid judicial and try to settle out of the court. 

[Austin Tam]

Originally posted by @Sam Shueh:

A lawyer charges $350 an hour minimum several hours and can be costly. A court is where it is decided. If it is a few 100 bucks I will avoid judicial and try to settle out of the court. 

The balance is somewhere in the realm of $2k, which isn't going to bankrupt me. At the same time, I'm not keen on being the first potentially liable party to fold under the pressure of the debt collector. 

[Sam Shueh]

I can see pros and cons on this. If you were there when it happened your witness will carry a lot of weight. Insurance company has the patience and legal backing to settle at Small Claim Court. Try to find a mutual mid point to settle the damage with the owner. Move on.

[Austin Tam]

Originally posted by @Sam Shueh:

I can see pros and cons on this. If you were there when it happened your witness will carry a lot of weight. Insurance company has the patience and legal backing to settle at Small Claim Court. Try to find a mutual mid point to settle the damage with the owner. Move on.

I appreciate the feedback. The owner filed a claim with their insurance to pay to repair the fence, so it's the insurance company that's seeking reimbursement, not the owner. 

With that said, I may have jumped the gun on getting defensive. I just spoke to the debt collector and it was a surprisingly pleasant call. He told me there doesn't seem to be any negligence on my part so I likely won't be responsible for the damages. He told me they'll reach out to my property manager to get a hold of the contractor's insurance info. I guess we'll see how this plays out. 

Thanks again for the feedback. 

[John Underwood]

Originally posted by @Austin Tam:

Originally posted by @Sam Shueh:

I can see pros and cons on this. If you were there when it happened your witness will carry a lot of weight. Insurance company has the patience and legal backing to settle at Small Claim Court. Try to find a mutual mid point to settle the damage with the owner. Move on.

I appreciate the feedback. The owner filed a claim with their insurance to pay to repair the fence, so it's the insurance company that's seeking reimbursement, not the owner. 

With that said, I may have jumped the gun on getting defensive. I just spoke to the debt collector and it was a surprisingly pleasant call. He told me there doesn't seem to be any negligence on my part so I likely won't be responsible for the damages. He told me they'll reach out to my property manager to get a hold of the contractor's insurance info. I guess we'll see how this plays out. 

Thanks again for the feedback. 

That sounds promising!

[Joe Splitrock]

@Austin Tam the neighbor should not have called their own insurance company. In a case like this, the contractor should give the name of their insurance company to the neighbor. The neighbor should have called the contractors insurance company, who would have sent out a claims adjuster and taken care of the damage. 

This is why all contractors need to be insured when working at a rental property. It is to protect against their negligence, whether that is damaging the neighbors fence, a person walking on the sidewalk or damaging your property.

I would not hire an attorney. I would refuse to pay anything. If you are taken to small claims court, just present your case. Explain that the neighbor should have filed a claim with the contractor and push all blame to the negligent party. I am fairly sure you would win and I am not sure someone even bother going after you in court based on the facts.

[Wayne Brooks]

@Joe Splitrock Agree that the contractor’s insurance company, assuming they have one, is the “first” liable party in the chain. But, the neighbor has every right to simply go to their own insurance company, which has the neighbor subtigste their rights for the insurance company to go after the liable party. 

Seems amazing to me they haven’t talked to the contractor’s insurance company yet though. 

But the OP as the owner is ultimately liable.....it was their contractor who did the damage whether they were hired directly, through the PM working as their agent, or as a sub to a sub to a sub, whatever. 

[Colleen Esposito]

Nationwide should subrogate against the contractor's liability policy to recover the money they paid to repair the fence.  

You may need to provide your policy to Nationwide, but as was noted above you have not been directly negligent.

Did you obtain a certificate of insurance from the contractor? In the future, you should both obtain this document and have yourself (more specifically the entity you own that owns the house) named as additionally insured on the contractors insurance to protect yourself from their actions that cause damage to others.  You should make this a requirement before they begin work.

[Austin Tam]

Originally posted by @Colleen Esposito:

Nationwide should subrogate against the contractor's liability policy to recover the money they paid to repair the fence.  

You may need to provide your policy to Nationwide, but as was noted above you have not been directly negligent.

Did you obtain a certificate of insurance from the contractor? In the future, you should both obtain this document and have yourself (more specifically the entity you own that owns the house) named as additionally insured on the contractors insurance to protect yourself from their actions that cause damage to others.  You should make this a requirement before they begin work.

Yup, I provided my policy to Nationwide. I didn't ask my PM for the contractor's insurance info, but it's probably a good idea to ask for these things moving forward. 

[Matthew Olszak]

Originally posted by @Austin Tam:

Originally posted by @Colleen Esposito:

Nationwide should subrogate against the contractor's liability policy to recover the money they paid to repair the fence.  

You may need to provide your policy to Nationwide, but as was noted above you have not been directly negligent.

Did you obtain a certificate of insurance from the contractor? In the future, you should both obtain this document and have yourself (more specifically the entity you own that owns the house) named as additionally insured on the contractors insurance to protect yourself from their actions that cause damage to others.  You should make this a requirement before they begin work.

Yup, I provided my policy to Nationwide. I didn't ask my PM for the contractor's insurance info, but it's probably a good idea to ask for these things moving forward. 

In the future, whenever someone works on your property request a certificate of insurance to be submitted from their agent naming you as certificate holder and additional insured, and to be notified at least 10 days prior to policy cancellation. That way you can turn that over to your insurance company in the case of a claim and they'll have the info necessary to pursue the contractor's insurance. Subsequently, if the contractor has certificates from his subs, he would do the same.

[Anthony Rosa]

What a lousy contractor! The contractor should have done the repairs or reach into his pocket and pay your neighbor for the repairs. This should have never went the insurance route. Any legit contractor would do the right thing.  Any decent contractor doesn't want to put in a 2k claim. Good thing your PM hired the contractor and not you. The contractor may not even be insured.

Also, being that the contractor didn't do anything for the neighbor the PM should have paid your neighbor directly then get reimbursed from his contractor that did the damage. Imagine if your neighbor was waiting to get paid or waiting for someone to repair the fence because he/she didn't want to file a 2K claim because the deductible is probably half the amount of the claim? Your PM is causing you to have a bad relationship with your neighbor and that is never good.

Give all the information to your PM since they hired the contractor and let your PM totally deal with this. You shouldn't have to do anything except keep a good relationship with your patient neighbor.  Your neighbor did right by looking for the property owner.  The neighbor shouldn't have to chase anyone and should only deal with you or your PM representative.