Steer Clear of NREIG for Insurance!!!

[Chad U.]

We had a policy with NREIG on a property we took back from foreclosure recently that became vacant, which was then subsequently gutted by a major fire.  I believe the fire was likely started by a squatter or the former occupant. Even though it was reported as vacant to NREIG, we were denied the claim by their carrier, due to there being no working smoke detectors found. 

This requirement, as ridiculous as it sounds, was in the carrier's master commercial policy, a copy of which had never once been provided nor had this requirement ever been stipulated by this agency. Even on the Evidence of Insurance, the policy is not even mentioned. It wasn't until after I reported the fire, that the "Third Party Administrator's" adjuster contacted me and was the 1st thing he pointed out. It's apparently a "Protective Safeguard", and the wording in the master policy is "Functioning Smoke Detectors must be in all habitational units and common hallways". However, this was an SFR!?

After this incident, NREIG now requires you to sign off every new property added to your portfolio stating it has working smoke detectors. I guess this was a learning experience for them, and they now require you to sign off to acknowledge this requirement. Unfortunately, we were the guinea pig!  After a bunch of research and especially here on BP, it seems to be a common occurrence that the carriers they use continually deny claims. 

In speaking with a few other agencies that offer Lender Placed and REO/vacant property insurance, there is no such requirement in their policies. They were also completely shocked that this claim was denied. In any event, whenever signing on with an insurance policy, request to see the policy and/or inquire with the agency of any exclusions, or specific requirements as part of the coverage.