A hurricane can damage, flood, or even level an apartment building, leaving owners and tenants empty-handed. In many cases, the only way to recover from these events is through fast and adequate payment from an insurer, but the influx of claims after a disaster often leads to denied or underpaid claims. Attorney Bill Voss explores the steps owners need to take after a hurricane and how they can get their units back on the market as quickly as possible.
What To Do After a Hurricane Damages Your Rental Property
If you are the landlord or owner of a rental property, you should contact your insurance agent as soon as possible after the damage to start the claims process. The insurer will likely make an appointment to come to the property and assess the damage. These inspections must be done before the claim can be settled, and the inspector’s findings will have a big impact on the value of your claim.
There are a number of things you must do before the inspector arrives, including:
- Take inventory. When it is safe to return to your property, you will need to create an accurate estimate of your losses. Walk through the building, taking written notes of all damaged property, such as structural deficiencies, flooded cabinets and carpets, broken windows, roof and wall damage, or standing water that requires mold treatment. Check your records for an accurate listing of the models and types of lost appliances. The best way to document the losses it by taking pictures or recording a video walkthrough of the property.
- Prevent further damage. You will need to secure the property both to prevent injuries and to ensure that there is no additional damage between the time of the storm and the date of repairs. Cover any holes in the roof or walls with plastic sheeting or plywood boards, and keep the receipts for any out-of-pocket expenses. Keep in mind that you are only preventing further losses, not performing repairs. Never remove debris or start to fix any property damage before meeting with the insurance company inspector.
- Talk to your tenants. It is a good idea to stay in communication with your tenants after the storm. If they require temporary housing, they may seek reimbursement through their renter’s insurance or through the American Red Cross. You may advise your tenants to contact their rental insurance company to make a claim, and suggest taking pictures or saving any damaged property as proof of their losses.
Will My Rental Property Insurance Cover All Hurricane Losses?
Coverage for rental properties can vary widely depending on where your property is located, the number of units you have, whether you have full chosen a replacement cost or actual cash value policy, the limits of your coverage, and whether or not you are living in the same building as your tenants.
Unfortunately, many owners will are denied payment for certain kinds of hurricane damage, such as:
- Property damage. Basic policies may only cover damage to the structure itself (such as roof leaks or cracks in the foundation) and may not pay for losses to other buildings on the premises (including garages, garden sheds, or carports). Coverage may also be different depending on whether the building is a single apartment, duplex, condominium, or multi-family dwelling.
- Debris removal and cleanup. Some policies do not cover the full costs of hurricane cleanup, including the removal of ruined furniture and downed trees, drying out flooded buildings with pumps and industrial fans, and pulling out muddy or molding carpets.
- Flooding damage. Commercial policies typically do not offer coverage for damage caused by flooding. Owners will need to pursue flood damage claims through the National Flood Insurance Program (NFIP).
- Rental income. Your tenants will need to live elsewhere while their apartments are undergoing repairs—and depending on how long repairs take, they may not return at all. Until your units can be re-rented, you will not have any rental income to cover the costs of property taxes, mortgage payments, and ongoing restoration. A policy that includes rental income protection can provide payment to make up this loss.
If an insurance company is attempting to deny, delay, or underpay your hurricane claim, we can help. Simply fill out the form on this page today to contact the Voss Law Firm or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.