Insurance & Criminal Acts
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Insurance & Criminal Acts (by RockyMtnLL [CO]) Feb 24, 2021 2:47 PM
       Insurance & Criminal Acts (by Moshe [CA]) Feb 24, 2021 3:55 PM
       Insurance & Criminal Acts (by Robert J [CA]) Feb 24, 2021 5:00 PM
       Insurance & Criminal Acts (by Nicole [PA]) Feb 24, 2021 6:27 PM
       Insurance & Criminal Acts (by RockyMtnLL [CO]) Feb 24, 2021 7:06 PM
       Insurance & Criminal Acts (by Ken [NY]) Feb 24, 2021 7:46 PM
       Insurance & Criminal Acts (by Ray-N-Pa [PA]) Feb 24, 2021 10:41 PM

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Insurance & Criminal Acts (by RockyMtnLL [CO]) Posted on: Feb 24, 2021 2:47 PM

A friend and I were talking. He said that if my rental units were to have some accident - as the result of criminal activity, i.e., a meth lab, or some other illegal activity resulting in the complete loss of the building, worse if it caused death of a neighboring tenant(s) - that insurance policies would not cover it.

I phoned my agent at State Farm, and they said that indeed, they would NOT cover any damage caused from an illegal activity. My agent added that if a neighbor died as a result of the accident, not only would they not get any insurance benefit, but their estate could sue and no corporate status would prevent it from coming back onto the landlord personally.

Since my income depends on rental income, if I were to lose an entire building, I would sustain the loss of the income, AND the cost of replacing the building - all without any compensation.

Beyond normal diligence in screening tenants, are any of you aware of other insurance policies or protective measures that would protect against such an loss?

As added information, she initially said that this is why the renters need renter's policies, but then she made a couple of phone calls and said that those policies would not be honored either if the loss was caused by illegal activity.

With many governors across the country restricting evictions, this seems like an especially large liability.


Insurance & Criminal Acts (by Moshe [CA]) Posted on: Feb 24, 2021 3:55 PM

If my rental units were to have some accident - as the result of criminal activity, remember that it has to be YOUR criminal activity that caused the loss.

If you had no knowledge of illegal activity, then as far as you are concerned, the loss was accidental and you are not liable. Better to re-review this matter with your insurance agent, and require a more complete explanation from him.

Insurance & Criminal Acts (by Robert J [CA]) Posted on: Feb 24, 2021 5:00 PM

I am trying to evict a couple doing illegal stuff in a condo I co-own. The HOA is trying to take legal action against me because I am the owner and I allow this conduct. In reality I have already gone to eviction court for cause and won the case. The court forwarded the information to the sheriff for lock out. The sheriff posted the 5 day notice.

Then the City of Los Angeles via their interference sent a letter to the tenants saying, "You don't have to move! Fill out this form saying saying you were affected by the pandemic, and you won't be locked out".

So the tenants said, "They tired to pay rent and I refused because it wasn't the full amount". In reality once I service a notice for cause, I can't accept rent".

So now I have to wait 30 to 60 days for another court date and then go through the posting and lockout, taking another month or two.

In the mean time they are doing illegal stuff that the Police care little about.

So what did I do? I took out a non-recourse loan for 100% of the equity. This way the HOA has no incentive to take legal action and get ownership. When it had no mortgage, then they wanted to steel it away from me.

Just wanted to put in my two cents worth..

Insurance & Criminal Acts (by Nicole [PA]) Posted on: Feb 24, 2021 6:27 PM

just a guess but I'd say it's the property owner (or their agent's) illegal activity.

Never say never but never would a property owner be held responsible from two bad guys running through a random yard shooting at each other and a bullet going through a window hitting the tenant.

Insurance & Criminal Acts (by RockyMtnLL [CO]) Posted on: Feb 24, 2021 7:06 PM

This story has a funny update: So, I phoned the agent today - and she said emphatically that I was not covered for ANYTHING illegal. So, I phoned an independent insurance broker and asked if they provided such coverage. He said he was happy to give me a quote, but that he suspected I needed to talk to someone above the lady I spoke with - because he was pretty certain I was already covered. He said there might be *some* exclusions, but certainly not a blanket "nothing." He asked for my coverage page, and I phoned back the initial agent and asked her to provide copies for me by email because I had found another agency that offered coverage.

Within a few minutes, a phone call comes from her boss apologizing. Turns out State Farm can cover most stuff associated with some damage caused by illegal acts, but not contaminant damage. That means, if a meth lab operates in one of my units, that damage would cost me to repair, as they would not cover the contamination.

I'm still pursuing a quote from the independent agent.

I'd be interested if any of you have dealt with independent brokers, and what your results were. I'll try to post what I find out. We all want to cut corners, and not pay unnecessary bills when possible, but losing your rental income while a property is damaged would be painful to absorb. And sustaining the litigation from an innocent neighbor injured or killed would also be regrettable.

Insurance & Criminal Acts (by Ken [NY]) Posted on: Feb 24, 2021 7:46 PM

I am pretty certain that Brad has said some time ago that he had an insurance company pay for a meth lab renovation.Maybe start a new thread if he doesnt respond

Insurance & Criminal Acts (by Ray-N-Pa [PA]) Posted on: Feb 24, 2021 10:41 PM

One of my tenants couldn't pay rent so they elected to try to burn the place down in 2019. They were unsuccessful and were caught within a couple of hours.

Insurance will not cover YOU burning YOUR place down, but if the resident elects to do something that stupid, you should be covered.

I am not sure how meth claims work. I am told the preferred method of making the crap is shake and bake which isn't as toxic as the stove top cooking that was wide spread 10 years ago. --24.154.xx.x

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