Pat Hune, Broker, 1st Southwest Realty, February 2019
Recently one of my clients decided to sell her rental property. Unfortunately when the tenants moved out thieves broke in. They stole all the copper and the HVAC components and broke out nearly every window. This resulted in thousands of dollars of damage. My client was sure her home owner’s insurance would cover the damages. Unfortunately the insurance did not cover anything except the windows. Her policy had a rider that said if there was metal theft then the deductible would be $5,000. An insurance rider is a provision that adds to, or takes away from, the standard policy. For example if you have valuable art or jewelry you would add a rider to the policy to cover this loss. Of course the insurance company will probably increase the cost to cover the additional items. In this case the insurance company slipped this rider in without specifically telling the owner. It never occurred to the owner to ask for this to be removed or modified.
I have written articles in the past letting rental property owners know they should check their policy to see if houses were covered when they are vacant. Several of our clients have had vacant houses damaged and the insurance companies refuse to pay. If someone really wants to get into a house it is nearly impossible to keep them out. It is very important to have the appropriate coverage for your investment properties as well as your personal home. The bottomline is to read your insurance policy. Yes I know it could be 50 pages long. If you don’t want to read it then be sure to ask your insurance agent if metal theft is covered or has a different deductible and if the house is covered when it is vacant.