Homeowner's Insurance FIRE question: Tenant's property covered?

Question

Two tenants displaced...Fire, lot's of property... Insurance has 180K limit, plus has 18K for "personal Property", 18K for "other property", $500.for personal property 3rd party...

Will lose two to three months rent (do we take the loss?)...

At fault tenant lost everything, 1st floor tenant lost living room...

Any provision for either non-faulting tenant (or at fault tenant) to recover from Homeowner's Insurance?

THANKS!

Answer 1

Sounds like you do have what's called a "rental dwelling policy" covering your property.  It should have a provision for loss of rental income until repairs are made.  

If your tenants want recovery, they should look to their own renter's policy  (you should require your renters to have this coverage) OR non-fault tenant can try to recover damages from either you or the other tenant.  Recovery from your policy possible but unlikely if there is no negligence on your part.  Your agent should be your key contact here in explaining your coverage.

Answer 2

18K probably only covers drywall, appliances, flooring and paint.

It's nice of you to try and use your insurance to cover their losses, but it's each person's responsibility to have their own insurance policy.  Don't use all your insurance to cover them and then be stuck with the huge increase in premium the next 10 years.

Answer 3

Tenants property is never covered on the landlord's policy unless it can be proven that the damage was caused by the landlord's negligence & there may be some coverage on the landlord's liability.  But for property coverage, there is no coverage to the tenants.  You may have loss of use or loss of rents coverage, check your policy & check with your agent.

Your tenants should have had renters or tenants policies to cover their things & their liability.

If the fire was caused by one of the tenants, the first floor tenant (not at fault) can go after them for their loss, they probably will have to take them to court to get a judgement, whether they will ever get paid is another story.

When your company pays for your damages to the building, they will also go after the at fault tenant for reimbursement of what they paid (this will include your deductible).  It may be a long time for you to see your deductible back but you will probably get something back before the other tenant does because your insurance company has lawyers & collection agencies they work with that do this all of the time, they will be able to seize assets (if any) and attach wages to collect their money back.

Good luck to you & sorry for your loss, hopefully no one was injured.

Answer 4

No, it only covers YOUR property.  The tenants are on their own.  Many tenants have renters insurance for just this situation.

You will likely take the loss on the rent you won't get during repairs.

Answer 5

The tenant's needed their own coverage.  The 18k in personal property is for the building owners contents (ie appliances).

Coverage for the rental income is optional.  You might have it.  It should show on your policy declaration as well.  Otherwise you don't have coverage for that.

Sorry for the loss.

Answer 6

Usually the tenants have to have a "renters policy" to have their property covered. Your policy would not cover their property.

If their property was in your care, custody or control - they may have coverage up to five hundred dollars (at your request). If you do not live in the home, the property is not in your care, custody control. This provision is more to cover the weed eater that you borrowed from the neighbor that was in your

garage when it burned down.

As far as lost rent goes - Does your policy have a coverage D - or Loss of Use? If so, this will help with the lost rent.

Here's some pretty basic info on a property policy. This is pretty general and their can be some variation depending on the language in your policy and the policy form you have.

But - A is always the structure

         B is always other structures

         C is always contents

         D is always loss of use

Coverage A - this number (probably 180K) pays for the structure and all fixtures attached to the structure. Think of it this way -- if you would leave it when you moved out -- it will be coverage A. So the vanity, toilet, stove - coverage A.  Usually you take a refrigerator with you- that's usually coverage C. This is the amount of money available to rebuild.

If you have an inflation guard endorsement - this number could go up. The adjuster will use a multiplication factor that is based on a standard table to determine how much the Coverage A limit goes up.

Also - your policy may allow for 5% of the coverage A limit toward debris removal in the event of a total loss of the structure. This is added to the amount of the coverage A.

Depending on your policy, your adjuster may have more to work with than just the coverage A limit.

Coverage B - other structures. This pays structures that form part of the realty that are not the residence structure. So outbuildings, fences, swimming pools, unattached garages will fall under this coverage. Usually this has a limit of 10% of the Coverage A amount. (18,000)

Coverage C - contents coverage.  This pays for your personal property. These are the things you would take with you when you move -- your clothing, your decorative items, the referegerator, and the stove can be put here if needed.  

It depends on the type of policy you have as to how much this limit is. It is usually a % of the coverage A limit.

In a rental situation -- this will cover your property in the unit - not the tenants. So if the refrigerator, washer/dryer are yours, this should cover those.

Coverage D - loss of use -- this pays for the rent that you are unable to collect. If you lived in the unit, this is the coverage that would pay for you to stay in a hotel or alternate location while your home is being repaired/rebuilt.

This coverage picks up the extra costs. So, if the fire never happened, you would have received rent. This coverage will help with the lost rent.

If you lived in the home, you would have to pay rent on your temp housing while paying the mortgage on your home. So, this coverage will pay the rent on the temp housing.

The other coverages are liability  coverages. These coverages would not come into play usually in a fire loss.

If your tenants did not have a renters policy, most likely, there is nothing your policy can do to help them out.

You've had a fire loss. It's ok to call your adjuster and ask them any question that comes to mind.  Its ok to ask questions more than once. There is no such thing as a stupid question.  So any question that comes to mind....ask.  Part of your adjusters job is to walk you through this process.

Answer 7

No.  Neither tenant can make a claim under someone else's policy.  Also, seeing as how there are two tenants, and it's a HOMEOWNERS policy, well, unless the rental arrangement was disclosed and included in the rating, it's possible that the homeowner is also going to have a coverage problem.

It doesn't matter whose fault the fire is.  If you want fire coverage, you have to buy your own tenant homeowners policy.  

The landlord doesn't have to put you up in a hotel.  If you want loss of use coverage, well, that would ALSO be on your tenant homeowners policy.  

Regarding the rent, normally it would be discussed in your rental agreement - normally, if you can't live there, they can't punish you for finding another place to live and breaking the lease.  Normally, you wouldn't pay rent while it's uninhabitable, because you wouldn't be living there.

You can always sue the 'at fault' tenant for your losses.  If it was an accident, they won't be held responsible.  If it was an 'on purpose', likely they will - but if they have no insurance, all you'll get is a judgement against them.

Property coverage is almost always first party only - you go to your own insurance company.  Someone else's property insurance, isn't going to pay for YOUR property damage, with very few exceptions.

Answer 8

I hope your insurance was configured to cover the property as a rental.  If you had only owner-occupied coverage, you may be totally denied.