All Forum Posts by: Tavisha Grant

Another thing to be sure about is getting a policy that covers water damage (not flood).  This would be damage from a burst pipe, failed supply line, etc.  I've seen many landlord policies that don't include coverage for water damage. That can be a costly mistake as I've been called to consult with investors on water losses only to find their policy offers no coverage. These were claims with $30k+ in damages.  Considering that a water loss is much more common than fire, you'll want to make sure you're covered.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

That's interesting.  As a public adjuster, any claims I work on of that size are monitored by the lender.  The lender is listed as a payee on the settlement check and they typically hold the funds in a hazard escrow account.  They then split the settlement into thirds and send inspectors out to monitor the contractor's progress before they release the subsequent draws.  I wonder how they got around that - especially the lender's inspection process.  That's horrible.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

One last point, I don't know about in Texas, but in Arizona when someone buys a surplus lines policy, they are giving up their right to participate in the state recovery fund should the insurance company go belly up financially. Personally, I dislike surplus lines policies unless there is no other alternative (such as a very unusual risk that no one else will cover). Investor-owned SFR shouldn't be in that category, in my opinion.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

I would be very concerned about that arrangement since all settlement checks will be multi-payee checks made out to all named insureds and any mortgage holders.  How would they handle claim settlement checks?  I've seen quite a few master policies written by The Mahoney Group, as I'm in Arizona, also, and they are a reputable company.  However, that is a strange situation.

Another factor that I would question is that in order to have a valid policy, the named insured must have insurable interest in the property being insured.  How can they be the named insured when they have no insurable interest?  I would ask those questions.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

Replacement Cost Value will pay you the full value to do the work to repair your building.  Actual Cash Value will only pay you the depreciated value with no opportunity to recover the depreciation after the work is completed.  

I am working with an investor right now on a fire claim in one of his apartment buildings.  He's insured with USLI.  Their adjuster agreed to our estimate of $52,000 in damage; however, my client has an ACV only policy and USLI is depreciating it $8,000.  My client has a $5k deductible.  So, after depreciation and deductible, he is going to get a check for only $39,000 on a $52,000 claim.  If he would have had a Replacement Cost Value policy, USLI would have paid him the $39,000 and then once the work was completed, he could have recovered the $8k in recoverable depreciation from USLI.  

When deciding between RCV and ACV policies, you have to ask yourself three questions:

1. Can I get the work done cheaper than what the estimate would likely pay?
2. Can I afford to make up the difference between the ACV and RCV?
3. Does the difference in premium make sense when all things are considered?

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

I agree with you.  Property Management companies don't do a very good job of handling damage claims and, in many states, are actually breaking the law by trying to negotiate the claim on behalf of their clients without an adjuster's license.  I work with a lot of investors when they have fires, water damage, vandalism, etc.  Having your own adjuster representing your interests in a claim is important.  You shouldn't have had to come out-of-pocket for any of that damage except for your deductible.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

Here in Arizona I think it would be a mistake to include electricity.  In the summer during our scorching hot season when temperatures are regularly over 100 degrees, tenants would run their units at 60 degrees - putting a lot more stress on the HVAC system.  I can see including water/trash/sewer.  However, I would never do electricity or gas.  That could bite you in the end.

I'm a public adjuster in Arizona and I work with a lot of investors who have insurance claims.  I've handled many vandalism claims just like you're describing (where vandals rip out the copper throughout the home).  On these types of claims the loan holder is covered as an additional insured and is named on all settlement checks as long as they are listed on the policy as the mortgagee.  Most policies have coverage for vandalism (barring a vacancy exclusion or limit).  Every policy is different and there are certainly creative ways to find coverage that the insurance company likely will not divulge to you.  My advise would be to contact a local public adjuster who's experienced working with investors.  You need a professional handling your claim.  Just do your homework.  Unfortunately, many in my field are unscrupulous or simply uneducated.  So, do your due diligence in choosing a good one.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

Might I also suggest that you develop a relationship with a local public adjuster.  I work for several different investors and part of the service I provide is offering investors a free policy review whenever they get a new policy and/or property.  Getting advice from an agent is helpful, however, most agents don't understand the policy they are selling from the claim standpoint.  A policy is only as good as your claims experience.  

A good public adjuster can become a very cost effective risk management department for your investment business.  I charge a contingency fee on claims I manage, so there is no up-front cost for my service.  The value a public adjuster brings to the table is (1) they typically increase the amount of your settlement (more than enough to cover their 10%-15% fee), (2) they will recognize any gaps or insufficiencies in your coverage so you can get it corrected before something bad happens, and (3) in the event of a claim, they will negotiate with your insurance company, prepare a damage estimate, read your policy to make sure you're getting everything you're supposed to get, and ultimately, save you time so you don't have to try to become a claims expert.

Tavisha Grant, Public Adjuster, Property Claim Adjusters, Phoenix, AZ

Thank you for your honest comments about PAs.  Like any profession, there are good and bad on both sides of the claim.  Goodness knows I am well aware of some of my competitors and their less than savory tactics.  However, there are quite a few of us out there trying to do a good job for our clients who need it.  That's one reason I typically wait to take on a new client until they've received their first offer from their insurance company.  Sometimes they get a decent first offer and don't need to hire me at all.  However, other times they get grossly low-balled and they need an advocate.  I have made some great professional relationships with folks who are either IAs or staff adjusters who write a well-written estimate (after the claim is reassigned to them once I'm hired) and who are obviously trying to take good care of the insureds.  Either way, it's still a good idea for investors to have a relationship with a PA before something happens.  That way they can review the insurance company's offer and let them know whether they need help or not.  After a loss occurs is not the time to be interviewing for a PA.