<p>Not advice, but sympathy. I hope the social service covers tenants, but my guess is that they don’t.
I have 2 friends, cousins to each other that are both landlords, but on opposite ends of the spectrum. One rents to nothing but HUD people, the other to No Hud people.
1 feels the assurance of getting rent on time every month is worth the other risks. The other feels the risks(such as a default, or physical damage) are too great to accept them. He says although theoretically he could win a lawsuit, it is unlikely he’d ever be paid because the reason they are on Hud is because they don’t have many assets or much of a job.</p>
<p>I know when I have inquired about potential tenants with my local Hud office, they are always careful to tell me they are not responsible for selection of the tenants, and that they are not responsible for their actions once that potential tenant becomes a tenant. </p>
<p>best wishes to Sylvan.</p>
<p>(somehow, at the moment, as I look at this thread, my post seems to be #1. Obviously there is an error somewhere, I should be post 9)</p>
<p>One of our rental units suffered a fairly severe fire today (no injuries). As we begin the process of dealing with the insurance company, making decisions on the future of the unit, et al, wondering if any of the other landlords on the forum (or even other homeowners) have any words of wisdom gleaned from similar experiences?</p>
<p>So sorry to hear that. We are in the process of closing on our first rental unit, buying insurance coverage etc. so I am curious to hear what others have to say.</p>
<p>I hope no-one was injured. Was the fire caused by a lack of maintenance? Or candles? or a short circuit? or a dryer? Can you talk about it at all, and is there something you would do differently?</p>
<p>The fire department believes it was caused by a space heater the tenant apparently left on in the bedroom when she went to work. It was her space heater, brand new, so not sure if it was faulty or if it was too near to something in the room.</p>
<p>The space heater I have has a big warning label on the front and among the things listed is “don’t leave unattended” due to the fire risk, even if it has an overheat shut off function…</p>
<p>I hope she has renter’s insurance or this could get messy. If the space heater was the cause, she was negligent (assuming she left it on and that is the cause) her renter’s insurance should cover the loss and you won’t have an increase in rates. If she doesn’t have renter’s insurance, be prepared to lose coverage on that building. We require all of our renters to carry renter’s insurance with liability coverage of $500,000 minimum–which is what it would cost to replace our rental house plus another house if the fire jumped to a neighbor’s house. </p>
<p>For your part, it’s fairly easy to file the claim since you won’t really have to account for any personal items. Contact your insurance company, file the claim through them, let them figure out who has to pay in the end. It will be a lot easier on you.</p>
<p>I would contact that social service agency and see if they carry coverage. I would most defiantly alert them to what happened. For now, you will be out your deductible and have to deal with all of the issues for the claim. You can also expect to see a rate increase, at minimum. Just know that NONE of her belongings are covered under your policy so if she lost everything in the fire, she won’t get any money from your insurance company. If you have other rental properties or units in that building, start requiring renter’s insurance, today.</p>
<p>Apparently, now we have hired another firm which advocates for the insured with the insurance agency to get a reasonable settlement (of which they, of course, get a percentage). (We know one of their agents, so are comfortable with hiring them.) The insurance company sent a fire inspector. </p>
<p>Meanwhile, the house has been boarded to secure it while efforts proceed on a plan.</p>
<p>I recently had a large tree limb go into my rental house as a result of a fierce windstorm that hit Virginia. Luckily it was vacant so nobody was injured and it was nobody’s fault. The adjuster was quite fair and the repairs were done within 2 months for under the settlement and the home is now rented and good as new.
Most important to know your contractor and have one you can trust.
We advise tenants to buy renters insurance but have not required that. Might have to look into that.
So far our rate has not increased.</p>
<p>sylvan8798–why have you hired that company? It’s a waste of money quite honestly especially since you are dealing with replacing the structural elements and not really any personal property. Just make sure you get 3 or more estimates for repair. The insurance company, if they are a good one, will work with your contractor and get things paid out. Just know, you will get a percentage of the damage up front. Once you complete the repairs and submit the receipts, you will get the rest. That is standard for the industry.</p>
<p>^The insurance company may try to cap the claim at the “fair market value” of the property, which would not be enough $ to repair the house. Right now, we don’t know what we are going to do with the property, since we could:</p>
<p>a) make repairs and keep it
b) make repairs and sell it
c) not make repairs and sell it as is (there is also a duplex on the same plot)
d) demolish this unit and keep the duplex
e) demolish this unit and sell the duplex</p>
<p>Apparently it’s kind of like some car accidents - you may need to sue the insurance company, they don’t just send a check.</p>
<p>sylvan8798–I think you are buying into the hearsay for claims. If you have replacement cost on your property you are just giving money away to this company–which probably amounts to the difference between the FMV and the replacement cost. Read your policy, what does it say, it should have replacement cost coverage along with a percent extra for bringing the building up to code, etc.–probably somewhere in the 20% range above the insured value. Yes, your first check WILL be for the FMV–which legally is correct. If you choose not to repair the building, then you are back to where you were before the fire–which is what insurance is supposed to do. You can pocket that money, sell the building and be done.</p>
<p>If you choose to repair the building, once your repairs are completed, you fax a copy of the receipts to the insurance company and they cut you a check for the repair costs in excess of the FMV.</p>
<p>They WILL just send a check after the appraiser has gone through the property and given his estimate. Sure, it takes a couple weeks sometimes because that check is mailed to your house. By law they do have to process this in a timely manner. </p>
<p>If your policy only has FMV on it, they are not legally bound to pay more than that.</p>
<p>Most issues people have with insurance claims is that they don’t understand how policies work and what exactly is covered.</p>
<p>Hiring such a company makes sense to me, if a person cannot come to terms with an insurance company. My S was in this business for a while. He helped negotiate what was called <em>FMV</em> if the insurer and the insured differed on the number. It seems premature to me though, to contract to pay them a % when it might turn out the insurance agency might have offered a fair amount to begin with. And, some people don’t know, but even the amount the agency offers the insured can be negotiated(without a hired professional negotiator).
imo, slyvan has hired a negotiator to effect a “reasonable settlement” without even knowing that the first offer from the insurer is unreasonable. There may be no harm in this(other than risking ill will at the insurance agency) but it seems like contracting for a service before knowing if the service would be necessary.</p>
<p>I’m getting a copy of the policy from BIL. Additionally, the firm we’ve hired helped us with a previous damage claim on a different property. It’s my understanding that the policy is NOT a replacement cost policy (which are very expensive relative to the units in question). This may have something to do with the need for an advocate to fight the insurance co.</p>
<p>sylvan8798–replacement cost policies are really not that expensive, probably add maybe $50/year or so to a typical homeowner’s policy-if that. If it is NOT a replacement cost policy your agent is NOT doing their duty and selling you a crap policy. </p>
<p>If the policy is not replacement cost, the insurance company has NO legal, nor do you, for getting more than that. Why would you think you are entitled to something you are not paying for? Sorry but the firm you hired is just laughing the way to the bank. Basically are setting yourself up for a fight that you are not legally entitled to fight. What will happen, however, is that the insurance company will probably pay the claim because it costs them less then going to court so, sure, you will win but will you feel good about yourself knowing that they are paying more than they should, your rates and the rates of everyone else in your area are going to go up, just because you didn’t buy the right policy?</p>
<p>Basically what you are asking the insurance company to do in this case is to give you a brand new BMW because you have a dent in the bumper of your Honda Civic.</p>
<p>Pay the public claims adjuster. My folks had a rental property that was severely damaged by fire, and I wished they had done this from the start. The insurance company tried to get them to accept painting sooty and lightly charred framing materials with Kilz, argued forever about whether the double paned windows had seals that were blown during or before the fire, did not want to replace the whole roof when more than half of it was ruined, didn’t want to have all the insulation & drywall pulled out that had gotten soaked by the firefighters. and tried to deny coverage for further weather damage to the house after the fire because the tarping didn’t fully work. Plus, the “damage restoration” firm that the insurer recommended charged a fortune and was just happy to go along with whatever the insurer wanted – because that’s where they got their business.</p>
<p>It was a years long mess. </p>
<p>I hope it doesn’t happen to you, but I know that if we had a significant fire, that call to a public adjuster would be one of the very first calls I’d make. Been there, done that, and saw the claims process devastate my folks. Don’t need to be any more of an experiential learner.</p>
<p>All this is very interesting, and I hope to see the whole thing play out here on the forum for the edification of other landlords and homeowners.</p>
<p>
Not sure how you can make a judgment on the matter with as little information as you have so far, but I am interested in all your opinions and experiences. Do you work for an insurance company?</p>
<p>will have to disagree with a couple parts of steve’s comments(post 16)
While I agree replacement adds only a few bucks to a homeowners’ policy, my experience is that it adds significantly more than $50 to a rental(commercial) unit. Perhaps because a tenant is more risky?
And, I can see that what the insurer comes up with as FMV may or may not be accurate for 2 reasons. 1) they are in the business of keeping their costs low, and 2) the first # they throw out is much like what a car dealer throws out- very negotiable.</p>
<p>I want to add that honest people can disagree on the fmv, and still have integrity. We don’t know sylvan’s estimate of fmv costs or the insurers’ estimate of fmv costs. Since we don’t, I wouldn’t immediately jump to the BMW/Honda analogy quite yet. </p>
<p>However, I cannot completely agree with Sylvan either, “the need for an advocate to fight the insurance co.” while I agree this may become a valuable tool, I think hiring someone to “fight” before the insured even sees/discusses/negotiates the offer is premature. In fact, Sylvan hasn’t even told us if they have received their own estimate of damages yet. If they haven’t, it is way too early to spend money on a fight that may not occur. That’s like changing to a new car tire because you’re going to go over a rough road.<br>
Arabrab cites a personal example of this- after his folks saw an unacceptable offer, then they hired a pro, but I don’t completely agree with his conclusions. In my personal experience of 2 rental house claims(not as devastating as Sylvan’s) I have had fair and proper dealings with my insurer and did not need an extra hired gun.</p>
<p>It would be improper of me to assume sylvan’s insurer is as honorable as mine was; but just as improper to assume they aren’t. That’s why I’d advise to wait and see before spending additional money. Sometimes additional costs outweigh the benefit.</p>
The “policy holder adjuster” takes a pro-active approach and presents an estimate to the insurance company, which then gets negotiated down rather than waiting for the insurance company to present their estimate to us which would then very likely have to be negotiated up. Apparently they find that this works better for the policy holder. The adjuster’s estimator was there this morning.</p>
<p>
In this case, more like a '71 Dodge Dart. And that “dent”? Try the interior of the Dart is completely blackened and largely charred. All of the lath and plaster are destroyed. All the windows are shattered. There is a hole hacked into the roof. The insulation is pulled out. The carpets are covered in glass and the burnt contents of the interior. The doors have been battered off their frames with battering rams. The door frames are destroyed from the battering. </p>
<p>The ceilings all have holes bashed into them. The heating system is destroyed. The electrical system is destroyed. And a good dousing of water was added with a fire hose, so whatever wasn’t destroyed by the fire, smoke, and bashing by the firemen has water damage. Not only is there the damage, but we can’t rent out the Dart for at least 6-7 months.</p>
<p>We’re not asking for a BMW, but the little Dart was part of our business. We have insurance, we’d just like enough of a settlement to either get it back in operation or get it out of the way and move on.</p>