Rental House Fire (apartment, renter, bankruptcy, landlord)

[ShaneSA]

The responsibility is mute at this point. Let your insurance company handle it. If the tenant has insurance, your insurance will subrogate them. They will handle it.
As for the upgrades, it's a trade off. If the insurance will pay for replacement of the berber, the extra cost of hardwood will be the differance and your added expense. You can deal with the adjuster on costs and upgrades and pay the difference in total cost. Upgrades are common with a large fire, and I'm sure the adjuster will work with you on costs.
As for renter's insurance, the liability portion, if he has any insurance, may or may not cover the cost and your insurance will work to recover thier loss. I would not worry about being cancelled, even if you tried to get other insurance now, the fire is already on record. Work with the adjuster and try to keep the insurance company happy with the claim. They cancel if the claim gets difficult and over demanding.

[wigirl920]

Originally Posted by RebeccaLeigh

Just a note evan if he had renters insurance, it would not cover the hourse, renters insurance only covers the renter's belongings. The owners Homeowners policy covers the house and you should contact your insurance company any time you are renting out a home. Also you insurance company only has to repair your home to it's former condition, so if you want upgrades like hardwood, you have to pay the difference. They would cover new carpet and **like appliances**, if you want appliances that are more upgraded again you pay the difference.

I don't think that's necessarily always the case. Every person I know who has gone through a similar situation (due to fire & major water damage) all had upgrades done. In one case, the upgrades increased the value of the house by $80K. One person had their insurance dropped. Seems like there are many factors involved in how it comes out in the end.

Horrible situation to have to go through...best of luck!

[Drover]

Don't even bother trying to collect from the tenant. Let your insurance handle it and then they can try to recover from the tenant if it's even possible.

[Drover]

Originally Posted by SXMGirl

Ultrarunner, I never even thought about the insurance being cancelled. Not to be nosy, but did you sue your tenant? Are you still renting your property?

He can't sue his tenant if he already recovered from the insurance company. The law won't let him "double-dip" by getting money from his insurance company and from the tenant. By indemnifying him, the insurance company effectively stepped in and assumed the role of plaintiff to whom the tenant would be liable.

[Drover]

Originally Posted by aragx6

^^But it's also not true.

Renter's insurance covers the renter's belonging and it pays out when the tenant is at fault for something.

That's why landlords often require it. They don't care about your possessions, they care about their property.

Actually landlords require it (though I've never had one do so) to protect themselves from nominal damages done by the tenants (such as tenant leaves water faucet on, floor gets waterlogged and needs to be repaired), not as a form of total building coverage. They also require it to protect themselves from liabilities that arise from the tenant's activities, such as if a tenant's friend trips over the tenant's dog and splits his head open -- if a tenant doesn't have renter's insurance, the next target they'll come after is the landlord.

In short, renter's insurance policies don't cover the landlord's building, though it may cover nominal/partial damage. I have never seen a renter's insurance policy with coverage limits nearly high enough to cover substantial damage to or destruction of an entire building. Besides, having two policies cover the same building is a form of double indemnity that is not allowed.

[RebeccaLeigh]

A renters policy only has three coverages, personal property,liability,and med payments, the insurance company may go after the tenant, but usually only if they think they'll get a decent amount of money back. As for the upgrades that's a judgment call of the adjuster, be really nice to your adjuster, it'll help.

[Poohjz]

I had a house fire a couple of years ago. Make sure before you decide to "fix" it, that the rest of the house is structurally sound. If you have a basement, how are the support walls or timbers? How is the foundation walls? They use alot of water to put out fires, so it can easily damage them. What is the value of house compared to how it was insured. Did you have replacement cost or something else? Way the cost between what insurance will pay and what you will have to spend. It might be to your advantage to knock house down and start over or sell land. Also, if you decide to remodel house, tear everything out of house that was not burnt. That smell holds on forever. An example, ties my husband had in the fire, they were cleaned and aired out, smell fine till they get wet. Smell like the fire. Books we have, still smell like the fire. You will need to replace everything. Drywall, insulation and flooring and possible timbers. This is the time to fix all that is not right with the house. Also, mold is a concern if you don't clear out everything. It is easy to miss and is dangerous. It will cost more later and a bigger headache.

[sskkc]

I've ALWAYS had renter's insurance. There is $100k worth of liability on it. If the house we rent were to burn down due to our negligence, our insurance would cover the repairs up to that amount. If the homeowner's claimed the damage was more than what the adjuster decides, they will need to work with the insurance co first, before they go after the tenant. They will need receipts showing that their actual damages were more than the liability coverage and that there were no upgrades in the rebuild. If the homeowner submits photos of the home before the damage occured and they don't "line up" with what the adjuster found, it's likely their insurance won't cover them for that too. For instance, our previous LL only had photos that were more than 5 years old. Different appliances, paint, landscaping, etc. If there had been a fire, they would've had a really tough time if they attempted to get more from the insurance than the insurance company offered.

If the tenant has no renter's insurance, then the homeowner's policy will cover it. Unless of course the homeowner tried to save a few bucks and never informed their own insurance co they were renting out the house, in which case the homeowner's policy would be null and void.

Trying to sue a tenant for more than what you can get in small claims court is laughable. A tenant that isn't responsible enough to get renter's insurance is unlikely to ever have enough assets to quantify a lawsuit.

[SXMGirl]

UPDATE: Thanks for all of your help. The kitchen is completely destroyed, all of the flooring in the house has to be replaced, all ceiling fans have to be replaced, kitchen windows, front door, and repainting. From the outside of the house, no one can tell that there was a fire. I have complete replacement and the work has started. I am keeping my fingers crossed that the insurance is not dropped.

[texdav]

Most renters insurance only covers the renters property. If you didn't have a contract that requires them to buy homeowners then your out. But then it is always best to carry it yourself and include in the rent. Be sure and have the rent know that they need renters to cover any of their personal loss.Judgemnent in a accident can be hard to prove and a judgement is only that and collecting is another thing.