Updated about 24 hours ago on . Most recent reply
When the Property Changes but the Insurance Policy Doesn't
I was reading a BiggerPockets interview this morning with Darren Nix from Steadily, and one point really stood out to me. He described insurance policies as basically being written for a snapshot in time.
The more I thought about it, the more I think that explains a lot of the coverage problems investors run into.
Investment properties rarely stay static for very long. A long-term rental becomes an STR. A property sits vacant longer than expected. Someone starts a renovation. A hot tub gets added. An owner switches from using a property manager to self-managing. Meanwhile the insurance policy often stays exactly the same as it was the day it was originally written.
I suspect a lot of claim denials and coverage disputes start there. Not necessarily because the owner was trying to hide something, but because the property slowly evolved while the policy never really evolved with it.
It made me wonder how many investors actually revisit their insurance proactively versus only looking at it when renewal comes around or after something goes wrong.
Has anyone here had a claim situation where the carrier focused heavily on how the property was being used at the time of the loss versus how it was originally insured?