All Forum Posts by: Derek Lacy

Yes and standard renters will not protect against that in your property. 

State Farm, Farmers, Allstate, Travelers, even USAA's coverage forms do not cover damage to the premise for water damage. 

Safeco does. There are hundreds of insurers, so it's impossible to know each one, but that's a big six of them. 

So even if you do all that work to make sure they have renters, if they have any of those (but Safeco) they don't have water damage legal liability. No matter what that lizard says, not all insurance is equal. It's about as far from commoditized as it can get, but since no one reads the policy, it seems like your buying the same stack of paper no matter which insurer you buy from, that darn ink is always the issue. 

Nerissa Marbury Is it allowed? Sure underwriters can do anything. Have I ever seen an underwriter do it? Nope. The way that would settle 1 and 2 have coverage, three none. Let's say they do $75,000 in covered damages, and each exactly equally at fault. Insurer 1 pays $25k Insurer 2 pays $25k You get a judgement for $25k against tenant 3. The you could be your property insurer through subrogation (going after the at fault party). Here's a wrench to throw in your plans, in insurance we love to talk best practices. What are you doing to confirm tenant legal liability coverage for water damage? Traditionally fire, smoke, explosion are the only perils covered on tenant legal liability on the renters form. But some insurers cover water damage as well. Quite frankly overflowed toilet or bath is much more likely than explosion. My suggestion, ask for a certificate of liability each year from the agent stating you as additional insured and water damage is a covered peril on tenant legal liability.

Nerissa Marbury $500,000 is offered by almost every reputable renters insurer, the cost difference will be less than $2 a month. If all your tenants were traditional families, one house one renters policy will work, but as you know that's gone away. Insurers have been reluctant to recognize that if Jeff and Paul (roommates) live together, that they share financial interests (regardless of your J&S liability). But if Jeff and Paul were legally married they now share financial interests.

Patrick Basically they are telling you, your risks are to great for them. Go to a local independent agent. Might it cost $200 more per year? Yep. Might that $200 save you literally millions? Yep. You can use trustedchoice.com to find one near you.

Being a CPCU, I contacted one of the Kansas CPCU Chapters and asked them this question.  They responded that it is not illegal to require renters insurance in Kansas and is a best practice in risk mitigation.  They did state that some insurers in the area may not allow additional insured status, but other insurers will, it's up to the underwriter if they offer AI or not.  

They then went on to state they they would recommend putting the requirement in the lease (contract) so you can evict for breach of contract (if you were so inclined).  

Easier than eviction is people with multiple properties (usually 25+, so it's great for PM) can get forced place renters coverage, so they have it in the lease that they have to have it, when they don't or they let it lapse, then a fee is contractually added to the monthly rent of $10-20 to pay for the forced-place renters insurance.  

It works well this way, because the lease would read that the first $10-20 paid each month without renters insurance goes to the forced placed renters insurance.  So if their rent was $500, you let them know their policy expired, we've added the charge, they only pay $500, you then send them a late notice with $20 still due on rent and $50 late fee.  

It increases fee income as well as protects you from tenant caused and insurable damages.  

A disclaimer to the above, I talked to an insurance person that operates in this sphere all day, but it was not a KS real estate attorney.  

Kathleen Leary That's interesting. Do you know the law on that? Seems very odd a pro business state such as Kansas would limit a landlords ability to negotiate a contract. But it's insurance and law, odd is the normal. Just curiosity. No ill will intended.

Insurer can end representation by paying the plaintiff the policy limits... good luck and yes, you need legal representation.

Not sure how you file against the master policy, you are probably not an insured. Call your insurer and let them know about the third party claims. Sounds like you may have an expensive settlement on your hands.

Arguing may work. But there are much more affordable flood options than the one you are being presented. If you don't have a good independent agent, we can help.

Nreig does not sell a Builders Risk policy. They can write a property policy for a property under construction, but that's a far cry from a Builders Risk policy. How does a vacant policy cover the material interests of the GC and Subs? It doesnt. Meaning the hvac sub drops off the furnace, place burns down overnight, no coverage for the furnace (not installed). How does it cover testing? It doesn't. There are many holes to the NREIG policy. If understood you may be okay with them. But if not understood they could bite you. AIG is my absolute favorite remodelers Risk market. Followed by Zurich. You will need an independent agent to access either. We do write in all states, and many on here do too. So we are all available to help.