I just had a drunken driver rammed his Chevy Silverado into my rental home at middle of Friday Night. Thankfully the tenant’s son survived with bruises & lacerations, who was right at the impact point. The truck was fully totaled and the driver survived. Need your inputs & feedback on best way to approach this.
He drove over the side walk…
Drove into the concrete fence wall….
Then rammed into the bedroom exterior wall…3 feet into the home.
It’s a 4 bed 3 bath home
1 bedroom is fully damaged
Adjacent bedroom closet is damaged
Both bedrooms & a bathroom don’t have power
Now the tenant is staying in a hotel (they said they would be claiming on the drivers auto)
Now the tenants are saying they would like to pay only 50% rent until they find a new place. They are going to break the lease. I do understand their concern as the place isn’t fully functional for them.
The driver did have auto insurance (progressive)
I have home insurance (travelers)
Tenant has rental insurance
I’ve already filed a claim through my insurance (travelers) for getting the place ready. Looks like fixing the place is going to take atleast 3 months.
But for loss of rent and tenants hotel expenses, lease break charges etc. How could I get that covered ?
Do I have to file a claim against the Drivers auto insurance or should have to go to my Travelers ? Does drivers auto insurance even entertain these requests from a 3rd party like me ?
Need some of your inputs as to how I should approach this claim. Thanks in advance.
@Ravi Kiran I'm really sorry for your situation and happy that your tenant is not badly hurt. It could have been much worse.
There are several "good" things in this "bad" situation. Your tenant will be going after the driver and not you. There are several insurances involved that should cover most of the losses. That your tenant is willing to pay 50% of the rent is interesting because a property must be habitable to live in and to pass inspection and your home is likely not habitable.
In my lease, I have a clause that covers this exact situation. The tenant will pay to go and pay for a motel of my choice for 30 days. I will cover any motel rental amount over the house rental, which is only fair. If I cannot bring the tenant back within 30 days, I allow the tenant out of the lease if they choose or the tenant payment clock starts again for the next 30 days, etc.
I presume that you've checked your insurance policy to see if your insurance covers rental loss. My guess it does not. You or your tenants rental loss and other losses, such as, extra costs of eating out, laundromat costs, etc. seems to be a simple smalls claims issue, presuming it is less than $3-$5,000. If more, then you will have to go to the next higher court with its higher initial costs, about $300 in my area of NYS.
In addition, be sure to check how long your homeowner's policy will stay in effect when empty. Insurance companies will not cover an empty house for more than 60 days so a different policy will be needed to cover any time over 60 days. Make your insurance agent your best friend.
MOST IMPORTANT - hire a Public Adjuster to represent you with your insurance company. Do NOT sign any agreement with your insurance company until your Public Adjuster has looked over their offer. When I had a loss, the insurance company offered $4000. The Public Adjuster got them to pay $40,000!
Good luck - you may need it. CoachMitch.com
Definitely contact your carrier and submit the claim. Also contact the Drivers Insurance and submit the claim. Normally, they will wait until they have gotten their insured's version. In this case they may not because the liability is clear cut. Let your Insurance know that you contacted the drivers insurance. Hopefully the driver has adequate Liability coverage to handle the entire loss so none of it goes under yours.
@Mitchell Goldstein Thanks a lot for your thoughtful inputs. Regarding the Public Adjuster: what is the best platform to find one and what would be the charges involved ?
@John Mocker Thanks a lot for the inputs. I would surely do.
My rental policy covers lost rents in the event of something happening, and also will pay for the tenants hotel. I personally would move to release the tenant from the lease as the property is now untenable, and having them on a lease is just another complication.
I would have an in person sit down meeting with your agent and ask them all the questions you asked us. Like Mitch said, don't sign anything but the best person to ask insurance questions to should be your agent, they should have all the answers and should be able to help you through this.
Generous use of the word should because I have never been in a situation like this.
Odds are good that the tenants insurance will cover the cost of temporary living situation. Their renters insurance will try to get that reimbursed from the auto insurance.
You should notify the tenant ASAP that the property in not habitable. They need to remove their belongings and move out ASAP. You do not want them living there or paying rent. Let them break the lease. Talk to your insurance company and a personal injury attorney about rents. Your insurance may cover lost rent (depending on policy) and they will go after the auto policy for reimbursement. The personal injury attorney may also be willing to sue the driver on contingency. I realize that you were not injured physically, but loss of rent and loss of tenant may give you a case. I suggested a personal injury attorney because these type of attorneys will take cases on contingency, which means you only pay them if they win.
Do not let the tenant stay in the property because a damaged property creates liability and gets in the way of rehab. Do not attempt to collect any lease break fees or further rent. Return their security deposit in full. You do not want to create a situation where the tenant has cause to sue you. If they are angry over being told to leave, let them know it is for their safety and direct their anger back to the drunk driver who made you BOTH victims.
Hopefully you have "loss of rents" under your policy as that's where it would/should be covered. If you don't have this coverage with your carrier, then unfortunately, they likely won't pay for your loss of rental income over the course of reconstruction. There are many carriers that provide this, so unless you rejected it with your current agent, you should have it. If it was never offered when you purchased your policy as an option, then I'd question why. It's important and should be at least mentioned or offered by your agent.
As for the tenant, they should have "loss of use" coverage to allow them to move to a temporary location while your rental is being fixed up. If they don't plan on returning, then their policy "should" pay for them to live somewhere temporarily until they find another more permanent rental somewhere else. If they can find coverage under the liability policy of the at-fault party's insurance, then even better for them. Either way, you shouldn't be responsible for this expense as the owner/landlord.
The best route is for every party to file claims under their insurance carriers, and to ensure this is what's happening. In the end, your carrier (Travelers) "may" pay for all the damages and then look to subrogate back against the at-fault party's insurance carrier (Progressive). Travelers is not required to subrogate on your behalf, but given the scope of the damages you've described above, it would be very likely. That is unless Progressive steps up and pays the claim / costs directly themselves. It's unlikely, but possible given how easy it is to place the liability on their insured (the at-fault party). Hope this helps.
@Ravi Kiran Google: "public adjusters" Chandler Arizona (or town property is in) The percentage I paid was reasonable: $40,000 received, about $1,400 paid in commission. I would be interested to learn what you find out. I have someone I can refer to you if desired.