Outstanding claim effects other properties?

Question

I had a claim 6 months ago due to storm damage of a roof. The insurance company has not denied the claim and is not responding to my messages so the claim has just been left open. I need to purchase insurance for completely separate properties in my portfolio, but the insurance broker is telling me that I can't bind any new insurance until this claim is closed.

How could it be that one open claim prevents me from insuring other properties? How do big investors avoid this issue?

How could it be that one open claim prevents me from insuring other properties?  How do big investors avoid this issue?

Tracy B. · Answer

Yes, painfully we do required that claimed have to be closed before we can bind coverage on the SAME property.

I talked to my underwriting department and they said because in order to calculate risks--they have to see the claim report completed.

Although--if you work closely with your agent--you can ask them to work with underwriter about your specific case.  They can contact your current insurance to learn more about the claim and if they ok with what they see--they can go ahead and give you coverage.

For OTHER properties--I don't see a reason why they couldn't bind coverage you need.

John Mocker · Answer

Chris,

If the properties are both in your name or the same LLC, the open claim would show up when the new company runs a "CLUE" report.  The insurance companies share claim info with CLUE so they have a database of the claims that have occurred.   Later, a company can purchase a report from CLUE that shows the claim activity.  I believe that the report looks up claims for the property address entered and the named insured.

At this point, any company that is insuring the new property will question the open claim.   For some companies, their Underwriting that they file with the state of NY may specifically state they do not write if there is an open claim.  I doubt that one of those companies would make an exception.   Other companies that do not have that in their filings with the state may still not want to write that situation but would be more likely to make an exception if provided with sufficient info.  Also, there are Excess & Specialty markets that may write the Properties but the coverage usually is less and the cost more.

Any agent that you contact will need to know why the claim is open and what the likely outcome is.   You may want to consider a separate LLC for this new properties.  That may help with the new company.

Jeff B. · Answer

Report the issue to the State Board of Insurance :grin:

Outstanding claim effects other properties?

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