Insurance Claims for Tenant Vandalism in Florida Rental Properties

Tenants don't always treat your rental property as if it was their own home. When does their damage rise to a level that justifies making a homeowners' insurance claim?

The relationship between a landlord and tenant can range anywhere from very good, to a passive business relationship, to outright contentious. If a tenant doesn't respect the landlord's property, or a contentious relationship manifests itself physically and revenge turns into property damage, you might have grounds to make an insurance claim for that damage, and possibly even loss of use if the property is uninhabitable because of the damage and you’ve lost rental income.

An experienced local public adjuster can review your insurance policy and compare it to the specific situation you might find yourself in. VIP Adjusting's public adjusters are based in Port St Lucie, and handle property insurance claims throughout Florida's Treasure Coast, including claims for damage to rental properties.

What do Landlord Insurance Policies Cover for Rental Properties?

Homeowners insurance for rental properties in Florida are relatively similar to homeowners insurance policies for owner occupied dwellings. They require disclosure of occupancy as a rental property, though you'll find the major difference in coverage for contents. 

The dwelling/building coverages are almost identical. A standard homeowners insurance policy for an owner occupied dwelling is an HO-3 or "all risk" policy, which means the policy covers all direct physical loss, and then limits coverage from there. The corresponding policy for landlords insuring rental properties is a DP-3 policy, or "Dwelling Policy" form 3. It shares the language for the dwelling with an HO-3 and is also an all-risk policy. 

A DP-3 policy for landlords may have limited, or no coverage for personal property or contents. This is important to discuss with your insurance agent in advance so that you aren't renting a furnished property without the proper coverage. Many landlord policies do cover landlord's furnishings. Again, this an issue you should check with your insurance agent or insurance broker on before you find yourself with property damage and having to make a claim.

There is also a less popular, and lesser quality policy for landlords, a DP-1 policy. It's cheaper and that gets some people to fall for the trap, because it really is an inferior policy that only covers a list of what are referred to as "named perils."

For purposes of the information in this post, we'll assume a landlord has the more common DP-3 all risk policy.

Wear and tear, and age related factors are not covered under landlord policies

Insurance policies have specific exclusions for wear and tear and other age related factors, because homeowners insurance is meant to cover direct physical loss and accidental damage to property. Insurance is not meant to upgrade or remodel your home, or to take care of overdue maintenance. If the carpets are getting old, that's not something your insurance policy is meant to pay to replace.

Likewise, what's sometimes referred to as "hard living" is not covered by property insurance. Anything that would normally be considered something that would be covered by the security deposit (although the security deposit would also apply to items beyond this type of damage, including your deductible if you need to make a claim) is typically not covered by your insurance policy.  Worn and stained cabinets wouldn't be covered by your insurance, or scuffs on tiles, excessive cleaning, worn paint or dirty walls. These types of things might be the tenant's responsibility, but likely not your insurance company.

What would a landlord's insurance policy cover then?

We've handled a number of claims for damages caused by tenants to a landlord's rental property. The two most common scenarios for these are damages caused by parties or party related activities, and angry tenants who have had a dispute with the landlord or been evicted, and before leaving the property have attempted some kind of revenge.

Some of the damages we've seen related to the type from parties or partying would be sizable holes in walls, cigarette burns to carpets (and sometimes fire or smoke damage if that isn't noticed right away), broken tiles from dropped objects, and, believe it or not, we've seen damaged roofs, decks, and patios from shenanigans related to pool parties. 

Sometimes the landlord tenant relationship can become incredibly vindictive and the tenant, in possession of the property may seek their metaphorical pound of flesh. Claims VIP Adjusting's public adjusters have handled from tenant damage have included smashed and broken tiles, stolen appliances, ripped screens and broken windows, holes in drywall and plaster, broken pipes (and related leaks), and damaged AC units are the most common. We've also seen a number of bullet holes. 

We have also handled a large commercial tenant vandalism claim over space related to a supermarket where the former tenant, after obtaining a new location and in order to protect their own business from a competitor went through the building destroying fixtures and utility hook ups, flushed concrete down the building's toilets, stole the air conditioning units on the roof, and poked holes in the roofing membrane. 

Loss of Use and Additional Living Expenses

If a building has sustained significant enough damage that it's no longer habitable, your policy may cover lost income from the inability to rent (or in a commercial policy, business interruption coverage), but only if certain conditions are met and only for certain time periods. This is one of the reasons assistance from an experienced public adjuster can be the difference in your claim. Lost rental income can exceed the damages to the property and can quickly become the driving point of a claim, putting your investment in the property itself at risk.

If you've found yourself in a situation where your former tenant has caused damage to your rental property, call or contact VIP Adjusting today for a free claim review. 

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Florida’s Property Insurers and the "Right to Repair"

Each property insurance company in Florida has tactics they use against claimants - “Right to Repair” is One

Last week we wrote about some bad actors (public adjusters and attorneys) in the minority who cause harm to the insurance industry causing problems for homeowners. This week we want to discuss one specific insurance company tactic that was recently in the headlines.

People’s Trust Insurance Company pioneered Florida insurance companies in using a program for direct repairs after a homeowner has sustained property damage, but an ongoing lawsuit alleges that the company pays bonuses to its contractors for cutting corners on those repairs.

What is the “Right to Repair”?

The right to repair, also referred to as the option to repair, direct repair program, or managed repair is an option in many property insurance contracts that allows a property insurance company to be in charge of the repairs that are performed when a home has been damaged instead of paying a homeowner to repair the damages themselves or find their own contractor.

This option for the insurance company is similar to language in auto insurance policies where instead of paying an insured who has been in an accident a some amount of money to shop around and get their car fixed, the insurance company may have a list of repair facilities that the insurance company knows and trusts will charge a fair price and who will presumably do a good job with the repair. 

In theory, this method can eliminate a lot of headaches both for the insurance company and the insured. It reduces the risk of a less-than-reputable repair person charging an unreasonable amount or trying to rip off an insured and creating an unnecessary dispute between the insured and insurance company, it reduces the risk of shoddy repairs, and most importantly it puts the insured back to pre-loss condition.

But, does this successful auto insurance solution translate well to homeowners insurance? Not exactly.

The People’s Trust Right to Repair

As we mentioned, People’s Trust Insurance Company was a trailblazer in Florida’s property insurance industry in exercising the right to repair. They weaved the whole idea of managing repairs throughout their business model. People’s Trust’s founder created a construction company that he wholly owned called Rapid Response Team, and if you made a claim to People’s Trust, they would send this wholly owned (read: conflict of interest) contractor to your property, charge you your deductible, and then try to profit by completing the repairs as inexpensively as possible. 

This method creates all kinds of problems, as you can imagine, where the insurance company is trying to maximize profits by charging premiums, maximize profits by delaying and avoiding paying claims, and maximize profits by trying to complete the repairs on a shoestring budget.

In practice, we saw nothing but problems come out of the managed repair program, and because they were profiting on every aspect of a homeowner’s insurance, we saw People’s Trust Insurance Company quickly rise in the number of policyholders they had throughout Florida, often undercutting other insurers and offering rock bottom premiums. After some initial complaints, People’s Trust started making people sign a waiver when they initially received their policies from an insurance agent that People’s Trust/Rapid Response would be performing the repairs if the homeowner made a claim for property damage.

Not long after People’s Trust started these practices, a number of other Florida insurance companies followed suit. None of the insurance companies had their own in-house contractors, but all the insurance companies who started down that path saw it as an opportunity to control profits by directly controlling the contractor who would do the repairs.

The Right to Repair Converts the Insurance Contract into a Construction Contract

When an insurance company exercises the option to repair, legally, it converts the insurance contract into a construction contract. Despite all the headaches and pitfalls of having contractors trying to cut corners during the repairs, an insured homeowner is often put into a better legal position because the conversion of the insurance policy into a construction contract removes the coverage limits, essentially meaning that whatever damage exists, the repair must be completed in a satisfactory manner by the insurance company, and meet all applicable building codes. 

The insurance company, then, steps into the role of a general contractor and project manager. Whatever general contractor the insurance company hires (and the homeowner typically is not given a choice like with auto repair facilities), then becomes a subcontractor of the insurance company.

The insurance company dictates a scope of repairs and an amount they will pay, and the general contractor then is in charge of meeting or exceeding that budget. Supplemental claims are typically met with extreme scrutiny.

In practice, we have seen contractors operating on such small margins dictated by the insurance companies that repairs often go incomplete, contractors walk off job sites, or in some extreme cases, we’ve seen contractors who have gone bankrupt and out of business before the job is finished and repairs are completed.

We initially said that exercising this option puts the insured homeowner into a better position legally, but for that to be enforced, it can often take significantly longer than a normal claim and require litigation to remedy. No homeowner wants to go through litigation if they can help it, but if your repairs have been botched or the job has been abandoned while your home is still damaged, you may not have a choice.

The People’s Trust Lawsuit

Recently a south Florida attorney filed a lawsuit alleging that People’s Trust and its affiliated companies used a deceptive and fraudulent business scheme related to the right to repair, often disguising this option as a nominal premium credit, only to then cut corners on performing the repairs to an insured’s damaged home. 

Our public adjusters can’t speak to the allegations in that complaint, specifically, but we sure have seen some serious problems with the right to repair, both for insurance claims with People’s Trust/Rapid Response Team and with other Florida insurance companies.

Some Horror Stories from VIP Adjusting’s Public Adjusters have witnessed

One of our public adjusters had a client whose repairs were performed by People’s Trust and Rapid Response team. The homeowners’ personal property were all placed in storage, Rapid Response Team performed about 95% of the repairs and then just disappeared from the job site. The insured couldn’t get Rapid Response Team to finish the punch-list repairs to complete the job, Rapid Response Team left a permit open resulting in a $10,000 fine to the homeowner, and no one would respond as to how to return the personal property to the homeowners. All their furniture was indefinitely in storage, meaning they had to continue to pay to live elsewhere for more than a year and a half.

Another insured with a different insurance company had a plumbing leak in a supply line to the dishwasher in their kitchen island. The insurance company’s contractor repaired the leak by digging through the floor (also referred to as “trenching”), but when repairing the damages to the home did a substandard job, leaving gaps in the floor throughout the home, unfinished thresholds, visible drywall patches, mismatched colors, and other substandard workmanship in almost every part of the home. While the homeowners were justifiably upset at the quality of the home’s repairs, the dishwasher leaked again because the contractor had reinstalled it improperly adding insult to injury. In this instance, the contractor walked off the job declaring that they had lost money on the job, and the insurance company refused to address the substandard repairs and the second leak. It was later learned that the contractor had declared bankruptcy following this job.

Yet another insured with a different insurance company had a plumbing leak that damaged wood flooring throughout a home. The insurance company’s contractor improperly installed the replacement floors without a vapor barrier which almost immediately buckled and caused significantly more damage than the original leak. Despite the new damage being within a week of completion of the repairs, the insurance company tried to disavow the damages, instead claiming the damages were the result of high humidity levels.

As it pertains to People’s Trust, we’ve also witnessed some unethical legal practices from them, as well. True to their business model, People’s Trust Insurance Company also has an in-house legal department with in-house attorneys. This is permitted by the Florida bar, however, in-house attorneys are generally not permitted to provide legal services for outside clients for a number of reasons. First, non-lawyers are not permitted to own an interest in a law firm and the attorney’s representation for an outside entity would essentially constitute the insurance company acting as a law firm. For that same reason, entities that are not law firms cannot represent clients. Notwithstanding these regulations, People’s Trust Insurance Company’s in-house attorneys routinely represent Rapid Response Team, despite the fact that they are separate legal entities.

The Moral of the Story

When staring down an insurance company looking to profit from the repairs by minimizing losses, you’re facing an uphill climb, especially if your insurance company regularly elects the Option to Repair, but the guidance of an experienced public adjuster can put you in a better position than you ordinarily would be and make sure the seeds have been planted to protect you in case the repairs should go sideways. If you find yourself on the receiving end of this type of tactic, feel free to contact VIP Adjusting’s public adjusters today for a free claim review. 

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Public Adjusters: Are they the problem?

Homeowners Insurance Companies in Florida like to point fingers, but are public adjusters the ones to blame?

Florida’s homeowners insurance companies are always looking to pass the buck or explain why they think they aren’t responsible for paying more for insurance claims for property damages. These insurance companies sometimes tell homeowners and insureds that they shouldn’t have hired a public adjuster, that it will just makes things more contentious and the insurance company or independent adjuster was planning to “take care” of a homeowner, but now they can’t because a public adjuster is involved. 

Is the insurance company telling the truth? Or is this just a talking point?

Every industry has bad actors, including public adjusting and attorneys

Florida sometimes feels like the insurance fraud capital of the world. Right up there with all of the head-shaking and eye-rolling news stories of “Florida Man,” it seems that with an equal amount of regularity there are news stories about public adjusters coordinating one scam or another. 

In the spring of 2019, an insurance fraud ring in South Florida was busted submitting phony property damage insurance claims involving 35 suspects led by a public adjuster, her relatives and employees, an insurance agent, a plumber, a handyman, a water mitigation contractor, and, believe it or not, her ex-husband who was a police officer at the time. 

At the time of publication of this article, there’s are ongoing matters involving a Florida attorney and law firm, public adjuster, and a water mitigation contractor either submitting fraudulent claims or manipulating valid claims to extort Florida’s insurance companies for additional benefits that wouldn’t have been justified had the public adjuster or attorney been reasonable at any point along the way. This alleged ring has resulted in multiple bar complaints against the attorneys and the law firm, an investigation (ongoing) from the Department of Financial Services, and a civil RICO lawsuit against all of the people involved from the state-run Citizens Property Insurance Corporation. 

Public Adjusters are only as good as their individual ethics

Despite the big headlines, these types of behavior are contained within the vast minority of attorneys and public adjusters. Florida’s legislature has acknowledged that the profession of public adjusting engages the public trust, and includes a high bar for licensing and a dedicated enforcement agency providing ongoing monitoring and investigation of anyone alleged to be conducting themselves in a way that is improper. 

Just as some individual attorneys, or areas of legal practice have gained the reputation of being “ambulance chasers,” the actions of some risk jeopardizing the reputation of the public adjusting industry as a whole.

VIP Adjusting makes sure to hold its public adjusters to the highest standards in order to provide representation to our clients throughout Florida’s Treasure Coast and Space Coast. 

What happens if insurance company talking points spread?

Unfortunately for the consumer, the insurance company talking points that public adjusters are the problem have been picked up by Florida’s Chief Financial Officer, Jimmy Patronis, the individual in charge of public adjuster regulation. In the aftermath of Hurricane Michael, and while Hurricane Dorian was approaching Florida, Patronis was reported to have held a private telephone call with representatives of Florida’s insurance companies saying that he would do what he could to eliminate the road blocks provided by public adjusters and attorneys. Subsequent to that, Patronis publicly bashed public adjusters and attorneys, blaming them for claim delays and assisting the legislature in proposing more restrictive regulations on public adjusters, citing the minority bad actors, without acknowledging them as a minority, as a reason for the attacks. 

In reality, a public adjuster is only as beneficial for the consumer as that public adjuster’s ethics. To make sure you’re not getting caught in a trap set by your insurance company, or being grossly underpaid, it’s best that you vet any public adjuster you consider hiring. Ask questions. Request CVs and references for the public adjuster. Read reviews online. 

Pursuing an insurance claim for damage to your home or business is about more than just a number. It’s about rebuilding your life or your livelihood. If you haven’t established you can trust your public adjuster, you shouldn’t be signing a contract with that public adjuster.

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Public Adjuster vs. Independent Adjuster: What’s the difference?

How does a Public Adjuster compare to an Independent Adjuster?

These terms are definitely confusing, and we want to shed a little bit more light on what the differences between these types of insurance adjusters are, each type of insurance adjusters’ duties, and who they work for. Knowing the difference can make a huge impact on the final result of your insurance claim.

Aaron Fessia, Public Adjuster Inspecting Roof

Public Adjuster vs. Independent Adjuster

Public adjusters are licensed insurance adjusters that represent the general public, homeowners, business owners, and insureds when they’ve had property damage or other direct physical loss to their home or business. Independent adjusters are also licensed insurance adjusters, and have similar qualifications to public adjusters, but they work for and on behalf of the insurance company. 

VIP Adjusting is a public adjusting company operating in the Treasure Coast, representing the homeowners and business owners of St Lucie County, Martin County, Indian River County and the surrounding areas. We fight for you and act as advocates for your claim against the insurance company.

Public Adjuster defined

Public adjusters are sometimes also referred to as private adjusters, public insurance adjusters, or private insurance adjusters. They might also be called a “PA.” Public adjusters are licensed and regulated by the state of Florida through the Department of Financial Services and overseen by Florida’s Chief Financial Officer.

The term public adjuster is defined by Florida Statute 626.854 as any person, except a duly licensed attorney at law who, for money, commission, or any other thing of value, prepares, completes, or files an insurance claim form for an insured, or acts on behalf of or aids an insured in negotiating or effecting the settlement of a claim for loss or damage.

A public adjuster is also any person who, for money, commission, or any other thing of value solicits, investigates, or adjusts such claims on behalf of a public adjuster. Other individuals may assist a public adjuster in their duties, and other professions, such as general contractors may perform duties that are typically associated with their license (like preparing estimates). General contractors cannot, however, negotiate with the insurance company on an insured’s behalf.

Attorneys may act as public adjusters but are exempt from licensure

Attorneys are exempt from the licensing requirement because they are already qualified to evaluate Insurance contracts and negotiate settlements by nature of their bar license. An attorney who would like to obtain a public adjuster license must also go through the requirements and testing from the state of Florida. VIP Adjusting’s founder is both an attorney who is a member of the Florida bar, as well as a licensed public adjuster.

Public Adjusting engages the Public Trust

Because public adjusters work for homeowners and other citizens of the general public, public adjusting engages the public trust. That means a duty must be exercised where the interest of the claimant is fairly and honestly put above the public adjusters own interests. 

Public adjusters in Florida are held to very high standards, including multiple different required codes of ethics. One code of ethics is for all adjusters in Florida under Florida Administrative Code 69B-220.201. Public adjusters are also governed by Florida Administrative Code 69B-220.201(4)(5).

The public adjusters at VIP Adjusting are also members of the Windstorm Insurance Network and have been certified as appraisers and umpires, adding additional codes of ethics to which they have agreed to be bound above and beyond the ordinary codes of ethics. 

Public Adjusters work on behalf of the homeowner. Always!

Public adjusters fight for you! Their duty is to advocate for you and your claim. The purpose of insurance is to put you whole after a loss, subject to a deductible. Your insurance company is supposed to be restoring you to pre-loss condition, and your public adjuster’s job is to make sure that an insured gets paid fairly for their claim and that the insurance company is not causing unreasonable delays or taking advantage of the insured. 

Most public adjusters charge a percentage of recovery as a fee. Studies conducted by the state of Florida have shown that the average difference in payment between a homeowner making a claim on their own and a homeowner who has retained a public adjuster, more than makes up for the cost of paying a public adjuster. That figure is based only on the average dollar value of the claim without accounting for delays, denials, or other missteps related to a homeowners inexperience. 

Independent Adjusters work for insurance companies

What a misnomer, right? You read that right, though. Independent adjusters are licensed and governed by the state of Florida, similar to public adjusters, but their license does not allow them to represent homeowners or insureds. They work FOR the insurance company.

Independent adjusters either represent insurance companies directly, or work for third party adjusting companies that are retained by insurance companies on a job-by-job basis. 

Despite the fact that an independent adjuster’s salary is paid by the insurance company, many homeowners are lulled into a false sense of security because this adjuster interacts with them and may even seem very friendly. Independent adjusters may also make certain promises while walking through the insured’s home even though he doesn’t have the final say as to what gets paid. Homeowners may be confused thinking that because the adjuster is called “independent,” then his evaluation should be independent. This is not correct. 

When VIP Adjusting handles a supplemental claim for a homeowner, we often hear that homeowner refer to the prior evaluation by an independent adjuster as the report prepared by “my adjuster.” Remember, an independent adjuster works for the insurance company, NOT for the homeowner. 

Even when an independent adjuster is following all ethical guidelines, the continuation of his employment still hinges on the insurance company paying as little as possible for your claim, and even when an independent adjuster is well meaning, there’s a representative inside the insurance company that often reviews and modifies that estimate before it’s approved for payment.

What to do if you have damage

If you’ve suffered loss or damage at your home, it’s best to get in touch with a public adjuster like VIP Adjusting as early on in the process as possible. In addition to having experienced professionals working for you to make sure you’re paid fairly for your claim, a public adjuster also works to prevent delays in the claim, and protect you from the potential landmines of doing it yourself.  

VIP Adjusting always fights for you!

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