Top 3 Landlord Insurance Claims You Must Know

Hello and welcome to Invest Smart with Steadily. I'm CJ Long, Director of Claims at Steadily, and today we're going to cover the top three most common claim types for landlords. For each claim type we're going to talk about some specific examples and things to know when it comes to the claims process or coverage.

Coming in at number one: weather claims. Hail and windstorms are most predominant in this category, but windstorms can be anything from a tornado ripping off your shingles to knocking a large oak tree onto the roof. One of the keys when it comes to these types of hail or windstorm claims is that you take action to mitigate damages. Most policies are going to cover reasonable emergency measures when you take them to prevent future losses, so make sure you get a tarp on the roof to prevent future water damage or get that tree removed to prevent further structural damage. Failure to mitigate can lead to damages not being covered, so it's really critical that if you have a weather-related claim you're taking action to prevent future losses. And finally, make sure you're taking photos and retaining any invoices on any of those actions taken.

Coming in at number two: water damage. The most predominant of these types of water damage claims are burst pipes or maybe roof leaks, but water doesn't get better with time. Again, take action to mitigate, photograph, document, retain invoices. One thing that we need to point out when it comes to water damage claims is that damage caused by groundwater or surface water — more commonly called floods — are not covered under the standard dwelling policy. If you're looking for a flood policy, make sure you talk to your agent. Maintain the property and ensure proper drainage; those are a few ways that you can mitigate potential flood losses.

Number three, and the most common claims for landlords, are theft, vandalism, and malicious mischief claims. This can be anything from a break-in to graffiti to broken windows and doors and of course stolen items. Most policies are going to differentiate in theft coverage based on what item is stolen. Items integral to the dwelling itself — fixtures, countertops, copper — those items are generally covered under the base dwelling policy or DP3 policy. However, stolen personal items like couches or washing machines, items that are not affixed to the dwelling, those are generally considered personal property and you may need an added theft endorsement to be covered. At Steadily we do offer a limited theft endorsement that can extend that coverage.

One thing to point out when it comes to these types of theft, vandalism, or malicious mischief losses: it's important to distinguish that vandalism is an action involving the deliberate destruction of or damage to property. A common misconception is that a tenant being careless with your property or treating it poorly is considered vandalism — that's actually not the case. Vandalism is a crime, and that's different than wear and tear. If it's a crime, make sure that you're reporting it to police. In most cases the policy requires that any damage as a result of a crime is reported to the police, so it's critical that that's an action you take right after a loss.

Security systems can often be great deterrents, and have a plan for when your property is going to be vacant. Your policy may have certain clauses that don't protect you for vacancy extended beyond 30 or 60 days, so make sure these are proactive conversations that you're having with your agent.

Understanding the most common insurance claims for your type of rental property can help you take proactive measures to prevent them or respond should a loss occur. Regular maintenance, thorough tenant screening, and comprehensive insurance coverage can often be your best defense against these types of losses. If you've got any questions or need personalized advice, feel free to reach out to us at Steadily Landlord Insurance and follow along for more real estate investing tips. Thank you.