Rental Property caught on Fire

8 Replies

Words of wisdom in case this every happens to you:

1.  Before you file your insurance claim, contact a Public Insurance Adjuster

Not only will you get a higher claim paid for damages, but they will help you determine damages.  They will meet your insurance adjuster on site and do all the leg work for you.

In exchange, they will want 10% of the claim paid out to them.   But I think it's well worth the cost.  Quite frankly, since someone else told me about using a Public Adjuster, I plan to hire one for every insurance claim that I file against all of my properties.

2.  Be sure you understand in advance that your lender (if you still have a mortgage) will want to control the insurance money released to you if the claim is over $10,000.00.  I recommend hiring a General Contractor who will be sure that the communications between you, the bank and the sub-contractors go smoothly.  Less headaches for you.

3.  You can contact the City Fire Department for a full report on the cause of the fire.  Often times they can recommend a good company that will restore your property.

4.  Have the property secured including your outside A/C unit.  It will take some time for the insurance company, adjuster, Private Adjuster and Lender to make funds available to start the repair process.  We had the A/C unit secured with a cage and had the house boarded up to deter thieves and vandals from creating further damages to your property.

5.  Keep a positive attitude.  This type of property damage is very stressful, but once you spend the time putting all the right people together.  You will be able to better handle anything that comes up.  

6.  Most important to me, is to contact all of your insurance agents now.  Ask them to add "rent loss" to your policies.  I learned the hard way, that not all insurance policies are created equal.  

I hope this post has helped you.  Or will help you be better prepared in case a fire occurs at one of your rental properties.

This is great advice, thanks Stacie!

I am a contractor and adjuster that works on the side of the clients our fee is 10% but we get the owner so much more than what the insurance will give most of the time we get them 30% of what they can get . Most of the insurace company give out is 65% on a dollar and the adjuster gets the other amount. So true alot of the properties that we go in after it has been sitting the take the pipes out cut pluming and take anything of value so alot of times it is a second claim. I tell anyone to work with a adjuster to get the most out of your claim. If I can give you more advice any one who has any property take pictures of every room and upload them so much is missed when you do a claim .

Originally posted by @Stacie Meeker :
6.  Most important to me, is to contact all of your insurance agents now.  Ask them to add "rent loss" to your policies.  I learned the hard way, that not all insurance policies are created equal.  

I appreciated all of your points, and words of wisdom, but I specifically wanted to call this piece out (in bold). As a Commercial Insurance Broker, so often, people think you are trying to "pad" their insurance policy for more money by throwing in"unnecessary" items. While I will say there may be some brokers/agents who do this; in the vast majority of cases, if something is recommended for a policy, it's because: a. it is something that is optional for the policy, but is continually seen as a claims exposure, or b. the amount to add to your policy is minimal, but should you experience a loss, your personal payout could be significant if you didn't have that coverage.

As a brief example, a of commercial policies will have a nominal amount for building ordinance losses (link to a good definition of this coverage:

http://www.irmi.com/online/insurance-glossary/term...)

The reality is, if you own an apartment complex, and there is a loss that requires some updates to your property regarding ordinance; oftentimes they may require your ENTIRE property to have those updates. One loss that recently occurred was an insured who had a fire loss on their property, and their stairwell doors were required to be of a higher fire grade than they currently were, as well as some additional sprinklers, etc. This requirement required of ALL the buildings, not just the building that incurred the loss. Since the insured had only the minimal coverage limits on his policy for building ordinance he was out-of-pocket quite a bit of money to bring the other apartment buildings up to code.

This is just an example, but what I let my clients know is, if I recommend something it's not to pad the premium, but because it's a real exposure they may face, and given my past, extensive claims background, I am more sensitive to what losses ACTUALLY costs than a lot of others in my field. My general line is, "What is the maximum amount that you would want to pay out-of-pocket." If you have a cheap property that you got for 30k, and don't care if it burns to the ground, and don't want to pay that $500, $1000, etc premium, then that's up to you, as that's the cost you are willing to lose. Just my .02.

Thanks for this post, and sorry for your fire loss, but glad it was (relatively) a smooth process for you.

Insurance companies pay Xactimate reimbursement rates (with plenty of margin built in for your contractor) and they make you whole. The marketing barrage you see from restoration companies is funded by those high margins. In my experience public adjusters slow down the process and only get you enough extra to cover their fee. If you have a stripped down policy with a non standard carrier (which it sounds like if you didn't have loss of rents) then that is where the problem was. There is a time and place for public adjusters and attorneys but 95% of the time the insurance companies are operating in good faith and it is faster and easier to not get a 3rd party involved to be adversarial from the start.

Im with Joe. I just went through a fire on a single unit in a 28 unit complex. The best thing to do is get a contractor that specializes in insurance claims. My contractor uses xactimate, which is the most popular ins estimating system. My contractor told me what the max amount I could expect, and it was dead on. My contractor met me and the adjuster at the property. I didn't have to give a percentage to anyone, it was part of the service my contractor offered.

I had a property involved in a fire that was started next door. However, the same insurance company was the insurer on both properties. I was not satisfied in what the insurance company was providing me in order to repair, so I did in fact hire an adjuster. Some companies (ServPro etc.) write the estimates, but they're doing so for their own gain. ServPro will charge you 5x+ market rate.

The adjuster got me about $40K more than the insurance company offered. Since they only took a percentage on the amount above and beyond the insurance company, if I recall correctly their percentage was 25%-30% which worked out to have been the same if they took 10% on the total claim. I rebuilt the property and it is currently rented. However, in hind sight, I would have definitely paid off the lien and taken a full loss and moved on to something else.  

Key is also to use an insurance company who is well versed in rentals. I did and was covered for loss of rents, etc. My agent knew what I would need and set up my policy correctly from the start.

Originally posted by @Stacie Meeker :

Words of wisdom in case this every happens to you:

1.  Before you file your insurance claim, contact a Public Insurance Adjuster

Not only will you get a higher claim paid for damages, but they will help you determine damages.  They will meet your insurance adjuster on site and do all the leg work for you.

In exchange, they will want 10% of the claim paid out to them.   But I think it's well worth the cost.  Quite frankly, since someone else told me about using a Public Adjuster, I plan to hire one for every insurance claim that I file against all of my properties.

2.  Be sure you understand in advance that your lender (if you still have a mortgage) will want to control the insurance money released to you if the claim is over $10,000.00.  I recommend hiring a General Contractor who will be sure that the communications between you, the bank and the sub-contractors go smoothly.  Less headaches for you.

3.  You can contact the City Fire Department for a full report on the cause of the fire.  Often times they can recommend a good company that will restore your property.

4.  Have the property secured including your outside A/C unit.  It will take some time for the insurance company, adjuster, Private Adjuster and Lender to make funds available to start the repair process.  We had the A/C unit secured with a cage and had the house boarded up to deter thieves and vandals from creating further damages to your property.

5.  Keep a positive attitude.  This type of property damage is very stressful, but once you spend the time putting all the right people together.  You will be able to better handle anything that comes up.  

6.  Most important to me, is to contact all of your insurance agents now.  Ask them to add "rent loss" to your policies.  I learned the hard way, that not all insurance policies are created equal.  

I hope this post has helped you.  Or will help you be better prepared in case a fire occurs at one of your rental properties.

 Stacie, do you own a property that caught on fire?  I'm unclear here if this is just some type of advertisement or if you actually had a property you personally own that caught on fire, and if so, if you personally hired an adjuster.

Sorry, but this just reads like some kind of advertisement to me.

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