Your Property Insurance Is Not For Messy Tenants
I inspected a property for a customer recently who had a large mess in rental property after the tenant moved out. The tenant had not paid their rent for a few months and their relationship with the landlord had been fairly hostile, hinting at or threatening damage. The tenant finally moved out and left the property in a mess. No cleaning had been done, food and garbage strewn about, lots of trash, abandoned personal items of little or no value, and some damage to some walls, doors and cabinet doors. The landlord had already filed a police report to document the “damage”. As the landlords, husband and wife, showed me through the property they were very disappointed with the condition of the unit. They were pointing out filth, lack of cleaning, garbage and trash, stains on the carpet, pet urine damage to the carpet, etc. I asked them if their rental agreement allowed pets; they were not clear on whether it did or not. I tried to help them understand that their property insurance did not insure them against risks that they willingly said yes to. For instance if you allow pets in your rental, you have assumed that risk and your insurance company is not responsible for “pet damage”. Just by renting out the property, there is a risk that the tenant will not leave it clean or take care of it as well as you might. What does become a “covered event” for insurance purposes is when someone intentionally causes damage to the property. Damage from vandalism is potentially covered by insurance. I counseled them that they needed to become much more focused on any damage that may have been intentional. I also urged them to have me come back when the insurance adjuster came out to inspect the property. I spoke with them today and it sounds like they did not listen to or follow any of my advice. They said the insurance adjuster had already been there and it sounded like the adjuster was only going to cover modest amounts of damage and under multiple claims, which means multiple deductibles. So, when they met with the adjust they were probably anything but focused and just rambled as they did with me pointing out all types of unrelated issues and damage. So, even with specific coaching and advice and an offer of professional help they were able to totally screw it up.
It really helps to understand the basic principles of your insurance policy. The most basic is what constitutes a “covered event.” A covered event is the magic key that unlocks the coverage. A knowledgeable and experienced contractor can be very helpful in this process to be your advocate. Make sure your contractor does not have a relationship with the insurance company that makes the contractor more loyal to them than to you; and then listen to and follow their advice.