Fire!

14 Replies

There was a small fire in one my units and the unit will be unlivable for at least a week. What do other landlords think about my obligation to pay for temporary housing (i.e. hotel room) for the tenant while the unit is being repaired? Thanks.

-Pete

Does this require action from your insurance? I went through a fire at my personal residence. My wife and I hired a public adjuster to help with dealing with the insurance company. He was able to make sure they(insurance co) covered every expense. I'm not sure through a rental what would be required, but do not think it would be any different. 

What does your lease say? Are there any relatives around? Is the insurance around? Do you have another unit they could live in temporarily? I know my lease spells out my obligations. Usually if the insurance is involved they take care of the issues.

@Peter Spiro  

The proper insurance to respond to this claim is the tenants renters insurance.  A personal homeowners insurance provides coverage to the insured (homeowner) for temporary housing.  But a policy written for a commercial rental rarely has any coverage for this. 

I have a large client who has 1-2 fire per year, and does not ever worry about this because Red Cross always puts these tenants up in a hotel for a few nights. 

I have a part in my lease where I explain to the tenant the importance of renters insurance.  It informs them that my insurance does not cover them, it states that in the case of fire or natural disaster, that I have no coverage to provide them with temporary housing. 

I am strongly considering requiring a tenant bring me proof of renters insurance before signing a lease in the future.   I will probably soon adapt this policy.  

@Amanda Hoening  

Having this requirement in the lease is a great idea.  In fact, some insurance carriers require it.  The issue then becomes the administrative burden of tracking these policies.  As a past State Farm agent, I can tell you these renters policies cancel on and off constantly.

If it's a good tenant, pays on time....we help them make the move and pick up any costs that their renters insurance doesn't cover.  We make renters insurance mandatory in every lease and explain it to our renters at lease signing.  Fortunately, our losses in recent years have been limited to frozen pipes....Make sure you have a good local contractor walk though the repairs BEFORE you settle with the insurance company.  We do this for quite a few investors in metro atlanta through our other company HandyANDY.  Having someone you can trust to get the repairs done quickly is key.  

@Jason Bott  

 I am sure that people often start a policy and then cancel it once they get their lease signed.    But, should a fire happen, and for whatever reason a tenant decided they wanted to sue me because they felt that I should have paid for their relocation, I have my bases covered by "requiring it"  Therefore it shows in court that they exercised their own negligence after signing the lease by letting their policy lapse, and I did everything in my power to protect their well being in that aspect.  

@Amanda Hoening  

I'm sorry as I did not articulate my point correctly.  I was referring to your statement,

"requiring a tenant bring me proof of renters insurance before signing a lease in the future."

2 considerations,

1)  When you start to require to see proof of coverage you establish a precedence of making sure the coverage is in place for the renter.  So once you start to track it, you are committing to continue to track it for the term you rent to that renter. 

2)  If you stated the renters coverage was "good" at the time of rental, but then there was some shortfall in coverage.  The client can state that you told them that is all they needed and you should cover the shortfall. 

Both of these points unnecessarily open you up to vulnerability if you go to court.  No sense in going through the extra effort when it could be self defeating. 

That being said, you may want to talk to your lawyer who knows IA law to give a specific coarse of action.

I hope this mouth full was helpful.

My rental agreement requires the tenant to obtain rental insurance and name us as "additional insured".  That way I get notified of any renewals or cancelations.  Also, I can put in a claim on their account.

If I did not cause the fire then I am not liable for moving or costs of spending the nite in a Motel.  I would cancel any amount due for the time they cannot occupy a place if it was no fault of the renter.

@Curtis Bidwell  

Each state is different, but this strategy is not allowed in most states. 

Most states you can't charge them for when they can't occupy the apartment so you could rebate that to them for a hotel. My lease addresses this and requires renter insurance.  Still if the fire was resulting clearly from something for which I would have been responsible like electrical or if this was a long term tenant I might do something for them.

I work with someone who handles rentals and she pads in the cost of renter's insurance into the monthly payment then pays for the insurance herself on the renter's behalf.  1) she knows it's paid, 2) solves the responsibility to track it monthly, 3) guarantees coverage she thinks in necessary, 4) she carries so many policies that the insurance agent actually gives her a great deal and she passes the saving on to her renters.  I don't know if it is legal in all states, but it works in Idaho and has saved her alot of headaches as a landlord.

Thanks, everyone, overall I have found your responses very helpful.

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