Hey guys. I apologize that I've been MIA for most of the summer. It's been a crazy summer for me. Between changing careers, completing my first flip, family issues...it's been a busy summer.
Here's my situation: A (suspected) drunk driver drove into my all masonry building. This occurred Friday night. The driver hit one of the load bearing corners of the house. Due to the damage, the entire house had to be evacuated (duplex - two families displaced). Because of the concern regarding the structural integrity of the house, the house immediately adjacent to mine is also condemned (duplex - two families). A total of four families have been affected and the damage is pretty extensive.
I am meeting w/ my attorney next Tuesday. Insurance is on this already (got them out of bed at 3am on Sat. Morn). The driver isn't toast, but he's hurting: two broken legs, broken back and in a medically induced coma.
A few questions: Has this happened to anyone? What additional steps did you take? For better or worse, the driver was driving a commercial vehicle...yes, after hours, but obviously the company trusted him to be driving the vehicle. The guy does have a past, generally on the wrong side of the law: at least one felony conviction. This specific building gets messier and messier: It's in a flood zone so any improvements will have to make the whole building match the new flood code (building's worth about $50k; repairs will be at least $50k); the building is in a historic district; when SAR shored the building, they put the shoring on the foundation of the adjacent building...meaning the structural integrity of the adjacent building may be in question; the first engineering company didn't want to take on this project due to liability issues...the list goes on.
It's a total PITA. Thanks for any thoughts/suggestions.
I had a similar situation in Chicago. Had a property in an up and coming neighborhood. Property was a three flat and during a storm, part of the roof blew off. Before I was notified, the City of Chicago bulldozed the entire house. The bulldozing happened within hours of the storm damage and the city used a program called fast track to justify it. Fortunately, the insurance company more than covered the damage and we sold the lot to a builder.
I would check in with the insurance company to see what they will settle with you for the building as it may be easier to take a settlement and walk away.
@Mark Creason So if I understand you, I would settle for at least Mortgage + Demolition costs?
I know the municipality is considering a demo order on the building because of the length of time between now and when we would be able to properly shore up the building.
Thanks for your thoughts.
You said he was drunk did he get a ticket. Sit back and let your insurance company handle everything, and I hope you had more than the policy limits because the drunk driver can still sue you.
@Joe Gore When you ask if I had more than policy limits, do you mean higher than policy for bodily harm? If so: yes, I had more coverage per incident. What are his grounds to sue (or is it that he just lives in the US)?
Yes, the driver is under arrest pending final blood work.
Can you produce any verdicts in favor of a drunk driving plaintiff who drove into a house?
A lawyer will advise to sue whether they can win or not, and most insurance companies will settle rather than fight. This is the USA everyone sues.
No can you, but it does not keep them from suing.
@Joe Gore Thanks. I'm pretty sure I understand all you mention.
I agree, let insurance handle it. Assuming you bought it right and don't have crappy insurance, you could come out OK.
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Guys, I asked for some help, not a lesson in the English language. Please either post some suggestions or take this offline. Just remember: The Panda eats, shoots, and leaves. (or was it "The panda eats shoots and leaves"?)
@Liam Goble You are right. My apologies.
How are your tenants handling the situation? Have they been allowed to enter the property to remove any personal items?
If I understand the situation, it seems that the driver's insurance and the insurer for the company that owns the truck are on the hook for the repairs to your building, to your tenants for their displacement costs, and perhaps to you for loss of rent for the period of time it would take to put your building back into service.
By all means, let your insurance company handle the negotiation with the other insurance companies, but a settlement should be for much more than the mortgage and demo costs.
@Liam Goble I would not let your insurance company handle this. it is your house, your renters, your mortgage that needs paid, etc. The insurance is worried about spending as little as possible. You need to be active and look out for your interests.
The good news is that if it was a commercial driver they have more than the minimum state required insurance which is as low as $25k in some states. Than would not be enough to make you whole. I have also seen nothing that suggests there is a basis for a lawsuit against you. In most states now they are getting victim advocates who check to see if you get paid for all of your damages. You didn't just lose a few months rent. Even if they pay you market value you still have to look for another property, that takes time, you must do offers etc.. you must do closings, advertise for new renters, vette them, etc. before they lease. You have a lot of expenses you do not see at the moment.
I would let your lawyer handle everything. They are better at getting close to the amount you would need to cover all of your damages and/or losses. I would think just your other tenants and the nearby property owner would be the only ones that can sue. As @Jerry W. stated, You will have a lot of time into this to get everything settled and back to normal. There are a few insurance companies that really try to get you to settle for a lot less than what you might need to get everything taken care of. I have also known of cases where commercial insurance coverage pays a lot better than non.
@Jerry W. When you say to not let my insurance handle the claim, does that mean I should let the driver's insurance cover the claim or handle this through my attorney as @Terri Lewis suggests? One of the things I need to determine is if I actually have a claim against the driver or only my tenants and the residents of the adjacent building. Obviously, I'll know more when I discuss with my attorney next Tuesday.
On a side note, the state required minimums for property damage here in PA are $7,500, however, as has been stated, this is a commercial claim with higher limits.
PS. @Jerry W. , I had not considered some of the costs you mentioned. I'll certainly be adding them to my total costs. Thanks for your reply.
@Liam Goble I'm not an attorney but this was a commercial vehicle with the employee behind the wheel drunk. Your structure did not jump out in front of him. The insurance for the company will have to cover everything. The lawyer will take a large cut but I bet they will go for a lot more than you will need to cover your losses. That company is responsible for anyone driving their vehicles. I am amazed someone with a felony was allowed to drive a commercial vehicle. All that will be handled by your attorney. I had a friend a few years ago hit by a company vehicle and he did receive a tremendous amount for the damages, justly. The insurance company tried to settle before it went to court for less than the asked amount, but he just chose to let his lawyer handle.
I would also suggest future tenants screened, and no one with a felony allowed to be a tenant. Just shows lack of regard for the law.
@Terri Lewis Yes, I do screen my tenants. This whole accident underlines why you should screen employees. At my previous job, you couldn't drive a company vehicle if you had a DUI w/in the past five years.
@Liam Goble Ok Liam, this is coming from the perspective of an Illinois attorney. Not sure on all of Pennsylvania's laws, so don't take this as "legal advice". You will need to talk to a Pennsylvania attorney to be sure. But here are my thoughts. First of all, the drunk driver who drove into your building is not going to sue you. There are no grounds (based on the facts I have read). Plaintiff's attorneys work on a contingency basis and would never take a case like that. They will take crappy cases hoping for a settlement, but never something where there is not even an argument.
So the question is, what do you do? First, I would go to your insurance company and see if they will pay for ALL of your damages. As has been suggested, you need to calculate all of your damages from this, and think long and hard about what those will be. Make your claim with your insurance company. Give them all supporting documentation. If they will reimburse you for everything, minus a deductible, take it and they will subrogate (sue in your place) against the driver to get their money, and your deductible, back. That way you don't have to go hiring an attorney and pay attorney fees.
If you cannot get a satisfactory recovery from your insurance company, then you should go get your own attorney to go after the driver for his insurance proceeds. The problem with this is an attorney is going to take a chunk of your recovery (33% in most cases but try to negotiate down to 25%). In Illinois, attorney fees are not recoverable for negligence cases. And since property damages are a fixed number, unlike injury damages where you can recover for pain and suffering, paying attorney fees means money is coming directly out of your pocket.
Having said that, if this guy really was drunk, depending on Pennsylvania law, you may be able to seek punitive damages. In that case, you can recover more than your property damages, and possibly make up for the attorney fees.
So, to summarize, try to get a full recovery from your insurer first and let them deal with litigation. If you cannot, then hire an attorney that will work on a contingent basis and ask him/her about the possibility of recovering punitive damages since the driver was drunk.
Not a lawyer, I am an insurance guy, this is not legal advice nor is it telling you how your policy will react... its food for thought based on a standard policy as defined by the insurance industry.
The fact that is a commercial vehicle is probably a good thing as it means higher limits for the negligent party. It is very common for commercial vehicles to carry 1 million in liability. That isn't a sure fire thing, but it is pretty common. More limits is good because this dude and his commercial policy will most likely be responsible for all the damages.
As far as your insurance company and policy is concerned, this should be a pretty cut and dry case because they will be able to "subrogate." Meaning your company could pay you, and then sue the negligent party to recoup all the damages. Now, I haven't seen your policy, BUT assuming a standard coverage set up you should see the following coverage come into play.
- Coverage A - Building - Whether it is repairable or whether it is a total loss will have to be determined. If repairable then they will pay to fix it; however, any upgrades you have to make because of city ordinance will probably not be covered... that is kind of scary in this case based on what you have described (historical etc). If a total they will pay the replacement cost or the limits of the policy, whichever is less... So hopefully you had it insured at replacement cost. If you had it at Actual cash value they will take the replacement cost and then deduct the depreciation. Market value really has no bearing in the insurance world.
- Coverage C - Landlord Property - Unless it was furnished, this really shouldn't come into play.
- Coverage D - Loss of Rents - This coverage will actually incentivize the insurance company to get stuff done. If you have this coverage it will actually pay you the loss of rents that you would have received while your tenants are out, as if they were still occupying the building.
- Additional Coverage - Debris Removal - One of the most important coverage options to come into play will be debris removal if you are responsible for bulldozing the building. Usually debris removal is counted "inside" the limit for your building... meaning if the building is worth $100,000 and you have a $50,000 loss then you have $50,000 for debris removal. If its a total loss then you USUALLY get 5% of the dwelling limit, so in my example you get 5K for debris removal. Check your policy. This part could be painful.
Ultimately, the negligent party should end up paying for all this, but in the twisted and real world life happens things never run as smoothly as they could or should.
As far as the tenants go... did they have renters policies? Additional living expense on their policy could coverage all the extra expenses they are going to incur living out of a hotel or where ever until they find a new place. Insurance guy plug here for renters policy.
I hope this helps... good luck.
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