Hi all,

Looking for advice for my new real estate dilemma. I had a tenant call me the other day informing me of a fire on the front porch. The tenant left me a message in the middle of the night informing me of the fire and told me her and her bf were in bed sleeping and her bf smelled smoke. The fire extinguisher was used and they called 911. Fire department came out and was able to put out the fire. I went out there that morning to assess damages, take pictures and clean up. I talked to the bf who informed me he was playing video games when he noticed an orange tint in the window and went outside and noticed the fire, grabbed the fire extinguisher and called 911. A different story than what the gf told me. Either way, the fire was odd, and there was no electrical around the area of the fire. However, they are smokers. Where the fire was, you can tell in started outside, and there is no damage on the interior of the house. My theory, he went outside, threw a cigarette butt in the planter and that is where the fire originated. I asked him if he was outside prior to, and he told me no. Regardless, I talked to the gf later that day.....I'm not an idiot and I explained my theory to the gf.  

Long story short we have had a decent landlord/tenant relationship for 4 years, and they are okay tenants. Nothing extraordinary about them. They pay rent on time and take care of the property just enough-ish. It's a duplex so they are responsible for yardwork and shoveling, which quite honestly lacks, as the grass is sometimes is a bit overgrown for my liking. Anyways, she does not argue my story, and things were left as is. The next day I got her renters insurance information and her policy number and was going to file a claim with them. However, when I spoke to her she informed me she was going to contact her insurance to let them know. She gets back to me later that night to inform me some story about how her insurance was never renewed after the year and they stopped auto deducting the payment, blah blah blah. So, no renters insurance. (I will confirm with the info she gave me, but I assume they have none). I have a high deductible plan with my insurance and I think the damage is less than the 5K deductible of my insurance. I have no problem paying out of pocket, but how would you go about making sure they pay you back, other than going to court? Court costs I'm sure wouldn't be worth it and seems to be a pain in the ***. I thought about talking with them and seeing how they would work with a payment plan and I would write up a legal agreement for that. Not really sure how to go about it, as I think they  would take responsibility for it, but I have my doubts. I have not brought up anything to them yet after her she told me about the lack of insurance. 

Those with more experience, what would you do? I have no  problems eating the cost and I have plenty of reserves and I know that is the name of the game. Clearly, for me lesson learned about making sure tenants have renters insurance. I want to play nice and try to get the money back that it will cost to fix it and then not renew their lease. Or tell them if they do not take the financial responsibility for the damage that I would evict and take them to court? I know she is worried, as she informed me she would hope I would work through this with her, as I know she wants to stay as a tenant. I think she is worried about her tenancy (clearly, they almost burnt my house down!). Just curious as to others thoughts on the manner?

Thanks in advance for any advice, I would appreciate it.

-Amy