This article is transcribed from Episode 28 of The Accidental Landlord. Listen to the
full episode, here.
TODAY WE HAVE AN ATTORNEY, BRITTANY ALEXANDER, WHO IS THE FOUNDER AND CEO OF PREMIERE PROPERTY LAW. TELL US ABOUT YOURSELF!
I’m an attorney who represents property owners against insurance companies, when their insurance doesn't pay or doesn't pay enough for an insurance claim to complete repairs after a loss. I started out on the defense side of an insurance company, however, I changed to represent the property owners against insurance companies. I love representing the landlords because there is a big disconnect between what insurance covers, and what people think it covers. So, I’m trying to educate clients, educate the public on how insurance actually works.
MANY LANDLORDS DON’T ACTUALLY KNOW WHAT THEIR INSURANCE COVERS, OR THE DIFFERENCE BETWEEN POLICIES.
I fell into insurance defense because I worked for a mid-size firm, and it was one of those firms where you do a little bit of everything. I ended up having these files that taught me everything about insurance, from how a house is built to everything that an insurance can cover. I loved going deep into insurance, because I learned how an insurance company thinks, how they operate, and who is really making all of the decisions. Plus, I ended up working with several insurance companies, so that gave me an insight in how they actually work. Thanks to this experience, I know how to defend my clients. I know what is going to work, and what is not going to work.
WHAT IS YOUR OPINION ON INSURANCE COMPANIES? ARE THEY LOOKING TO DENY CLAIMS IN GENERAL? I THINK THAT’S THE PUBLIC GENERAL OPINION.
They are structured in a way to benefit the insurance company. I don’t know that there is any intent to create harm to other people, I just think it is the general way they are structured.
DO YOU THINK IS ACCURATE THAT MANY INSURANCE COMPANIES AVOID LITIGATION?
I don’t think it is accurate. I think there are many insurance companies that are not afraid of litigation. I think they mainly base themselves on the facts of the case. I’ve seen plenty of cases where the insurance adjusters make mistakes, so they make up for their mistake.
WHAT IS THE DIFFERENCE BETWEEN A HOMEOWNER'S POLICY AND A LANDLORD'S POLICY?
The biggest difference is who is living at the property. A homeowner's property is the dwelling they live in. The landlord policy is coverage of a property they don't reside in. It's not their primary residence. Obviously, there are different risks when the homeowner isn't living in the home. A homeowner is more likely to make sure things are in good condition because it is their home.
At a rental property, although tenants want to live in a nice home, they aren't as invested. For this reason, there's a bigger risk to the insurance carrier and they have to treat it differently.
WHAT WOULD HAPPEN IF A LANDLORD DOESN'T TELL THEIR INSURANCE CARRIER THAT THEY ARE RENTING OUT THEIR HOME?
They are risking the policy not covering what they need it to cover, or any damage. It may even be void, which has happened in the past. Someone has damage at their rental property and we take on the case, but they never had changed their insurance policy. The policy just for homeowners isn't going to cover a rental. There is a grey area for those renting out a room in their house, since it's still their primary residence, but if you move out, it could be void. You're essentially uninsured.
If you move out and rent it out and six months later, a storm happens, the insurance company could refuse to pay for the storm damage since the property's function has changed.
If you want to learn more about the advice that Brittany Alexander shared on the podcast, listen to the complete episode here.
