A Renter’s Nightmare

The other day I received a call from a client, a doctor who’s leasing office space in a mixed use building (store fronts at ground level with apartments above).  He tells me his upstairs tenant left the water running in the sink all night long and flooded  the store fronts below, including his.  The landlord took care of the damage to his ceiling, but the damage to the carpeting and contents was up to the doctor.  I took the information and reported the claim to the insurance company.  The doctor’s policy will cover his loss to the property and income during the days he won’t be able to operate.  The damage is estimated to be about $2,000.  The other store fronts, however, suffered more damage – estimated  $10,000 – $15,000.

Now here’s the nightmare.  After the claims are settled, all the insurance companies involved will turn the claims over to their subrogation departments to recover the loss from tenant.  That tenant will have 3 insurance companies after him for payments.  Hopefully he has renter’s insurance, which would cover this type of loss under his personal liability coverage. But if he doesn’t, depending on how hard the insurance company wants to pursue collections, that money will be coming out of his pocket.

If you’re a landlord, in your lease, you can require your tenant to have renters insurance – if it’s allowed by the local government.  Be sure to collect a “certificate of insurance” listing you as a certificate holder and request an updated certificate every year. 

If you’re a renter, do yourself a favor and get a renter’s policy – even if your belongings aren’t worth much.  A renter’s insurance policy can be as little as $100 a year depending on the limits of coverage. 
Click here to get a quote.