What are some of the things you need to know about rental property insurance claims?
Rental property claims are more complicated than a typical residential claim for several reasons. There are two parties involved in every claim: the property owner, represented by an individual or company and property management firm, and the property renters of the damaged units.
For Property Owners: In the immediate aftermath of an insurance loss, property management firms are challenged to maintain their normal workload while overseeing additional tasks related to the loss. The property owner, the unit renters, property manager and support staff, brokers, adjusters, cleaning companies, contractors, and more all have their roles in working through a rental property claim. Keeping everyone abreast of their piece of the claim is time-consuming. It’s easy to miss a connection with a key player. From a communications standpoint alone, this can add several hours to an already packed work week—and that’s just one aspect of the claims process!
For Unit Renters: Do you have enough coverage on your renter’s insurance policy to cover the damage to your unit? Do you know what your policy deductible is? Can you identify the gaps in coverage? If you cannot occupy your unit, how will your living expenses be paid for while it is being repaired?
The Rental Property Owner’s Policy: Purchased by the rental property owner, this insurance policy covers the building, the common areas, and sometimes, depending on your state or rental agreement, the interior surfaces in each unit. However, the owner’s policy does not cover everything of importance to renters, such as personal property, and the cost to live elsewhere while repairs are being made.
Unit Renter’s Policy: Unit renters may wish to have enough insurance to cover their portion of the owner’s policy’s deductible plus an additional amount to cover a variety of other items that may not be covered under the owner’s policy. This can pose an enormous problem, as renters often aren’t aware of the limitations in the owner’s policy—or that the owner’s policy’s deductible has changed—so they do not increase their unit policy to protect themselves should a loss occur.