I need your help on this one! Hopefully an attorney I can hire to get more done as I have not been able to. There is a lot of moving parts to this story, so hang in there....
I bought a house from auction to flip in Colusa County, California April of 2023. I had vacant property insurance, with a "self report" which meant I had to take pictures of the house and send them in so they could see it instead of a person coming out and doing the same thing. The pictures finally got sent in approx 4 weeks later by my Project Manager. To add to the scenario I got a hard money loan for a fix and flip. I live about 1.5 hours away so I hired this project manager and a licensed contractor to manage the project. (mistake #1, living far but not checking in on it and assuming things were getting done).
Things were moving along, but at a snails pace. (Mistake #1, not checkin on things). The house was broken into with no damage twice. I bought simply safe to help detour and catch anyone breaking in. I asked her to get it installed. The house is in a rural area, low crime and had been vacant two years without any issues. Mistake #2, assuming the security was installed.)
The house was broken into and a fire was started on the third floor, assuming by a homeless person, a can of soup and a camping burner was left behind. The fire had approximately $6,000 worth of damage at that time. Could have been worse, but either it self extinguished or they put it out and left in a hurry. Discover the next day and police came out put in a report and that was about it. I filed a claim.
Claim adjuster came out, fire department came out to log it and an investigator that works for a law firm representing the insurance company "Loyd's of London. (I hope you are still with me)
Not a whole lot was said... just waiting on the claim to be paid so we can move on to fixing the damage, etc. Nothing was noted or said, other than make sure you have security in place. I asked my pm to make sure it was working etc, don't need another one! (Mistake #3, not monitoring it myself or being a more sophisticated system.). Didn't think another one, yes another fire would happen. Again, rural, nothing in the last two years, etc.. (Mistake #4, never assume nothing will happen again.)
Yep, Another fire, three weeks later, this time on the second floor and A LOT of damage. Quoted $600,000 in damage including taking the entire 3rd floor off and redoing in. And to note... I was into this about a year, and about 6 weeks to completion. Listing at $1M-$1.2M and purchased for $325K.
The first claim hadn't even been paid out yet but was getting close to when the second first occurred. This time, the fire department came out, police, and even Cal State Fire came to investigate...two fires, highly suspicious to say the least. And to add, I had been staying by mom's side in the hospital during her final days on this earth.
Claim adjuster, same guy, came out and the investigators for the law firm representing Loyd's, same guy came out. This time he, the investigator, showed me a door on the second floor was not secured, missing a handle, etc which was the case during renovation, but very hard to access if you had a ladder, and two windows that had old style brackets were not secured. His hint was that it is the responsibility of the contractor and PM to make sure it is secured as they knew I was not in town on a regular basis. Also, it appears, (still waiting on the final investigation to close to get the point of entry, but it also appears and confirmed by the PM that they or he/she etc got in through a kitchen window, which was not secure and when I looked, it was then secured by a piece of wood to keep it shut. Again, not secure. I pointed out all of the issues and the contractor said they always lock things up and it is not his job to be the "policeman".
Days later, I get a call from Jeremy who works for Loyds said, "they are denying the claim because a 6ft fence and a 24 hour security guard was not in place. "What"?? Jeremy said it was in the policy. WTF?? I called my broker and he said, "What"?? We never put that in our policies. Let me look into it." Well I looked into the document and lo and behold it was in the policy. WTF? The OS starting to happen, but I looked and I did sign it. (Mistake #5 READ your insurance policy!!!). Most people don't, that is not my expertise, I count on my broker to be the expert and to give me what I need that is reasonable. This is a SFR not an apartment building or a new build. But, it is in the policy and I signed it. The broker said, it must have been a glitch in the system. Crickets are now happening and finally I hear from the VP of the brokerage firm saying he has insurance for ENO error and omissions and they will be in contact. Another hurry and wait and wait and wait. I have not a burned house, no insurance, nobody wants to tell me anything, still under investigation, and the ENO insurance company hasn't called me back in to weeks. The contractor has filed a lien, people hate me, the neighborhood hates me, it's all boarded up and looks sad. I listed it for sale, I need to cut my losses. Listed for $575, reduced to $525 and just reduced it to $499.
I have lost a ton of money, I owe hard money, I had to refinance a property help me get out of it or partially. (Lesson #6. Don't put two properties in one LLC. I have a property in Texas 13 doors along with this property. I would let this one go to foreclosure, ouch, and be able to hold onto my Texas property, but now they are connected and I can't separate the assets.)
So, that's the story, I hope someone can help me, I feel like I am spinning circles in the endless tornado of hell.
