Homeowner / Landlord Claim Question.

[InsCommentary]

What's covered by the policy is not determined by the value of the home. It's determined by the terms and conditions of the policy.


I hate articles that say things like:

"According to some interpretations and courts, if 'you' no longer reside in the dwelling, coverage on that structure immediately terminates."

An absolutely useless piece of information without case citations.

Try reading the white paper. It has pages of case law citations, as do the webinars. The article I think you're referring to is simply a recap of prior communications on the issue over a period of several years.

The courts who have heard the residency issue run about 50/50 for/against coverage, with the courts ruling against coverage in a slight majority. I still don't agree with those decisions that hinge only on the "where you reside" language...I suspect the homeowner had less than top notch legal counsel and expert witness testimony.

 

[AZDave]

"Thank you guy. I don't want to give the homeowner the wrong answer, so your help is greatly appreciated"

Your job is not to adjust this loss, or determine if coverage exists. Your duty is to report this claim to the carrier (s) and get the heck out of the way.

$50,000 damage? It won't go away until you do.

 

[adjusterjack]

Hello Jack,

You seem to be an expert as this. What do you think I should tell the home owner? Claim or no claim? I'm tilling toward claim, but it would look really bad if they deny it, then he got his with increase premium.

Steve, I just read the "White Paper" suggested by InsCommentary and learned that, in 2015, ISO added additional wording to the countrywide homeowners forms:

"Residence premises" means:
a. The one family dwelling where you reside on the inception date of the policy period shown in the Declarations and which is shown as the "residence premises" in the Declarations.

(Additional wording emphasized.)

I suggest you read the Farmers policy and determine if it contains the new wording.

 

[djs]

Date of inception of policy period won't matter if it has been a couple of years with the tenant. It has already renewed at least once.

I agree with the concept of never discouraging the client from filing a claim. Heck, never give claims advice other then to manage expectations and to be a conduit to the proper person. As an agent, keep claims at an arms length. As the expert, this simply means you know what phone number to dial and perhaps know what questions to prep them for (i.e., car stolen? Get your cell phone records ready..... type of thing.)

Be prepared though, you are within 60 days of inception of the new policy. When they figure out there was an unlawful detainer filed prior to inception of the policy, the policy will be cancelled. Not non-renewed, but cancelled (maybe with notice, not sure). You may be lucky if its not rescinded entirely since they effectively started a claim prior to getting the policy.

How did you come up with the $50K number? I'm just wondering if this is a WAG or if you have some insight on this. Doesn't really matter except to appease my curiosity.

Dan

 

[VolAgent]

This thing has mess written all over it.

At best it is going to be a long ugly road to get the claim paid by one of the policies.

More likely, someone is going to be answering some difficult questions, including the agent who wrote a policy when detainer (I guess that is what you call an eviction notice in CA?) had already been served.

Were I the agent, I'd let the owner know they can file and due to the timing they may need to file against both policies, let the company know just in case the insured doesn't, and then get the hell out of Dodge. Also, I'd make sure my notes are all in good order.

 

[stevegonzales]

Date of inception of policy period won't matter if it has been a couple of years with the tenant. It has already renewed at least once.

I agree with the concept of never discouraging the client from filing a claim. Heck, never give claims advice other then to manage expectations and to be a conduit to the proper person. As an agent, keep claims at an arms length. As the expert, this simply means you know what phone number to dial and perhaps know what questions to prep them for (i.e., car stolen? Get your cell phone records ready..... type of thing.)

Be prepared though, you are within 60 days of inception of the new policy. When they figure out there was an unlawful detainer filed prior to inception of the policy, the policy will be cancelled. Not non-renewed, but cancelled (maybe with notice, not sure). You may be lucky if its not rescinded entirely since they effectively started a claim prior to getting the policy.

How did you come up with the $50K number? I'm just wondering if this is a WAG or if you have some insight on this. Doesn't really matter except to appease my curiosity.

Dan

Thank you guys, for all the advice. I agree that I should stay away from all of this mess. However, I just hate to be the guy who are all smiling when taking their money, and turn off the phone when they need help. Just a simple mistake of not converting the policy now cost them a bunch of money.

Dan, $50K is just a rough estimate throwing out by the home owner.

 

[djs]

Thank you guys, for all the advice. I agree that I should stay away from all of this mess. However, I just hate to be the guy who are all smiling when taking their money, and turn off the phone when they need help. Just a simple mistake of not converting the policy now cost them a bunch of money.

Dan, $50K is just a rough estimate throwing out by the home owner.

During claims time is when you earn your money. It isn't a case of turning off the phone, but just honestly saying what you know to be true, which is simply.... "I don't know, but lets go through the claims process and see what they can do."

A little hand holding goes a long ways to earning your commission. Trying to adjust the claim can get an agent in trouble pretty quickly.

My recommended pep talk when dealing with claims:

I realize this can be a confusing time, hard to understand what is going to happen or what is happening with the claim. Lets go over the next few days and what to expect.

You file the claim. Understand that you do this with a well trained claim taker,
not a person who actually adjusts the claim. Once they have the basic information, the claim will get assigned to the appropriate people.

The first stop is to ensure that there is coverage. Sometimes this is quick,
sometimes it takes a few questions. Don't worry about it if they ask a few strange sounding questions, its a process. Answer the questions as honestly as you can.

The claim will also get assigned to a property adjuster who will work with you to understand the damage and what needs to happen. Once coverage for the claim is determined and approved, then the adjuster will get busy in determining the total loss and will work with you to get the loss covered.
Understand that insurance companies do not do repairs or buy replacement stuff, they do what they do best, write a check. Give the adjuster 72 hours to get hold of you after you file the claim. They usually are quicker, but sometimes they get overloaded.

Understand that while the claim is being processed, you have an obligation to mitigate damages. What that means is if you need to cover a hole in the roof to prevent rain from coming in, do it. Get a tarp and put it over it. Save the receipts for anything you buy, they can be turned in as part of the claim. If you need to board the house up to keep further damage from happening, do it. Again, save the receipts. (You might suggest a company that can help do this, though the claims person should as well).

In the meantime, if you have questions, give me a call. I don't work the claim myself, but I can usually help track down people and get you answers.

Once the claim is in process, touch base every day till the claim is underway. Notice I never said anything about what is covered, not covered, etc, unless the claim is approved. I also setup expectations for timeline and process. For autos, I have a similar spiel, but I include a statement about fault determination and 30 days. Nobody wants to hear it, but its better they do from me then wonder why the claim drags out.

Dan

 

[stevegonzales]

Date of inception of policy period won't matter if it has been a couple of years with the tenant. It has already renewed at least once.

Hey Dan, so in this case, the date of inception of policy period does matter, doesn't it? The tenants have been there for a while, when the house was covered under home owner policy (and renewed a couple of times). The landlord policy is newly written (less than 2 months old).

Thank you for the advice on how to deal with the home owner. The problem is, he is pressing me on the question of will the claim be denied (as if I know, lol). Please correct me if I am wrong, but I think if he claims & get denied, his insurance rate will go up, or worst, his policy get cancelled. Am I correct?

 

[adjusterjack]

Just a simple mistake of not converting the policy now cost them a bunch of money.

No, not a simple mistake. A monumental mistake. A colossal mistake. A gargantuan mistake. An astronomical mistake.

You get the idea.

The problem is, he is pressing me on the question of will the claim be denied (as if I know, lol).

You can tell him you have no way of knowing. You can show him all of the issues that we've been discussing and that even the experts can't guarantee anything one way or the other.

Please correct me if I am wrong, but I think if he claims & get denied, his insurance rate will go up, or worst, his policy get cancelled. Am I correct?

Sort of.

Again, nobody can predict what WILL happen.

But, yes, there is a strong possibility that his rates will go up, either by surcharge of his current policy or being driven into the E&S market by cancellation or non renewal.

If the guy's got $50,000 to pay for the damage on his own, he shouldn't be worrying about what his insurance is going to cost him if he makes a claim. That's just plain foolish.

 

[djs]

Hey Dan, so in this case, the date of inception of policy period does matter, doesn't it? The tenants have been there for a while, when the house was covered under home owner policy (and renewed a couple of times). The landlord policy is newly written (less than 2 months old).

Thank you for the advice on how to deal with the home owner. The problem is, he is pressing me on the question of will the claim be denied (as if I know, lol). Please correct me if I am wrong, but I think if he claims & get denied, his insurance rate will go up, or worst, his policy get cancelled. Am I correct?

In California, if the claim is denied, it is unlikely his rate will go up, at least not significantly. Most carriers base rates on paid claims (even if its only a $1), not on claims made. Unfortunately, the claim will show up so if you change carriers, you may need to prove it was a $0.00 payout. You may lose some minor discount such as 3 years claims free or whatever, but that usually isn't a deal breaker.

The real problem that gets forgotten in these things is the policy will be set up for non-renewal, pending fixing of the damage (and proper policy in place). If the claim is denied, once repairs are done, you'll need to send the carrier some pictures of the repairs and frequently the building inspectors approval to get the policy fully reinstated so it will renew.

Dan