Cant get landlord insurance any more (due to water damage)

[James Murphy]

Hi - Ive had water damage in 4 separate units (condos) over the past 3 years....now my insurance company has dumped me and I cant find anyone else to take me on.

The company that takes care of my primary residence told me "insurer providers guidelines state they are not able to take new business with water damage claims in the past 5 years"

I dont want to take risk of being liable for $'000s damage.....is my only option left to sell??

Any help would be much appreciated.....pretty stressful time!!

 

[Cory Sperle]

Sounds like a nightmare. Have you reached out to a couple of insurance brokers and explain the situation? It seems unlikely that you would be un-insurable.

 

[DonnaMcGuire]

I think this is becoming more and more prevalent. I've heard of whole condominium complexes getting 'dumped' after water claims. How does that affect the unit owner's lenders' requirements for insurance? Maybe Chris at Park Insurance could 'wade in' on this?

 

[Martin1968]

Hi - Ive had water damage in 4 separate units (condos) over the past 3 years....now my insurance company has dumped me and I cant find anyone else to take me on.

The company that takes care of my primary residence told me "insurer providers guidelines state they are not able to take new business with water damage claims in the past 5 years"

I dont want to take risk of being liable for $'000s damage.....is my only option left to sell??

Any help would be much appreciated.....pretty stressful time!!

You are definitely in a tough spot. But frankly 4 claims in 3 years tells the insurance company something about either you as a landlord or the general condition of your properties.

It‘s not any different then car insurance.
Last year, thousands of car owners in Alberta were left without the possibility of buying comprehensive insurance, based on their driving habits and claim history. And from what I have heard, 2 accidents and a traffic violation in the recent past could already get you in real trouble. So imagine driving an expensive car, and only the basic insurance and third party liability is available to you, getting into an accident at fault where your new car is a complete write off, it can cost you tens of thousands of dollars.

So, going back to your props, im very certain you are thrown out based on your claim history.
insurance companies are all about eliminating risk and it seems you are one.

From personal experience, back in 2011 I had a serious water damage, followed up by another smaller one in 2012. I claimed both and premiums went up significantly the years after, (nearly doubled) and when another similar incident occurred I decided not to claim it.

Furthermore, I improved a lot of things from installing back up valves in drains in each unit, having the sewer lines cleaned and cleared each spring, to drip pans under water heaters, making sure water drains away proper from building and in certain cases installing metal roofs when roof needed replacement.
Haven‘t had any water damage claims since and having changed insurance companies afterwards, I was back to pretty much the old insurance premiums from the 2010 level. (Except for the huge insurance premiums increases of 25% plus we all had to endure last year)

So, if I may say, if you are able to purchase insurance, you will find your premiums are high, your coverage will be minimal and your deductibles will be high.
But if you stick with it, make improvements, and you are able to stay claims free for a numbers of years you might be able to bring premiums down again.

In closing, I just like to point out that i‘m not super knowledgeable on insurance issues, I’m sure a broker can do a much better job explaining then I can, but wanted to share based on personal experiences and lots of talks with people that work in the industry.
Wishing you all the best.

 

[C Westrop]

Hi - Ive had water damage in 4 separate units (condos) over the past 3 years....now my insurance company has dumped me and I cant find anyone else to take me on.

The company that takes care of my primary residence told me "insurer providers guidelines state they are not able to take new business with water damage claims in the past 5 years"

I dont want to take risk of being liable for $'000s damage.....is my only option left to sell??

Any help would be much appreciated.....pretty stressful time!!

Hi James,

I am sorry to hear about your situation but it is becoming more common.

You don't mention what the cause of the water damage was or if all of the units are in the same building so my comments are very general.

Once upon a time and not all that long ago water damage & sewer backup coverages were considered "throw ins" and weren't specifically addressed by insurance companies. Over the past couple of years they are now getting specific deductibles and premiums attributed to them and those premiums and deductibles have been going up. There are reasons for that.

At this time water damage is the number one cause of loss for residential properties and all insurance companies are tightening up on their underwriting guidelines.

Multi-unit residential properties specifically are facing considerable challenges at this time.
- Both condominium corporations and apartment building owners are seeing significant increases in both rates and deductibles - even if they have not experienced any losses at that property.
- Properties with a history of water damage claims are seeing deductibles of up to $250,000 for both water damage & sewer backup.
- Insurance companies are becoming reluctant to insure unit owners in buildings that have a history of water damage claims.
- The number of insurance companies that will even consider insuring multi-unit residential properties is shrinking very quickly.

With 4 claims in 3 years you are in a tough spot and I would recommend that you reach out to a couple of local brokers to see if any of them can assist you. Depending on your circumstances there are two scenarios:
1) If the units are not in the same building and there is no "common cause" of the claims it is very likely that you will have to be insured with a company that specializes in hard to place risks for at least a couple of claims free years. The coverage will be limited and the premiums & deductibles will be high but you would have coverage.
2) If the units are in the same building and there is a "common cause" (faulty plumbing etc.) of the claims and the cause has not been somehow addressed you may not be able to find coverage at all until the cause is addressed.

 

[Thomas Beyer]

Proactive maintenance is relevant.

Better is not claiming smaller to medium-sized problems ie fixing them as they arrive and not claim an insurance claim.

Lazy landlording comes at an ever higher expense and risk !!