How to Protect Your Investment When Property Goes Up in Flames


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One of the biggest risks property investors face is loss to fire. The repairs can be costly, not to mention unexpected, and the insurance claims process can be an unwelcome headache, especially for investors who live in another part of the world.

If the property is a beloved vacation residence, the process can be an emotionally taxing one. If it’s a long or short-term rental, a fire also means lost income and pressure to get the property rebuilt as soon as possible so tenants can return to their homes.

Whatever the case, you have two priorities: coming to a fair settlement with the insurance company and expediently resolving the insurance claims process. The sooner you can get back to rebuilding, the sooner you can return to your second home or start generating income from it again. Taking these steps can help with both of those goals.


#1 Get a Local Representative

You may want to seek out advice for home insurance claims from an insurance lawyer in the country where you own the property, especially if your policy is with a local insurer rather than one back home. An insurance lawyer can take the stress off of your hands by handling the paperwork and negotiating with the insurance company.

It’s their job to make sure the process goes smoothly, avoiding dispute resolution, while still negotiating with the insurer if their offer is too small. They bring a wealth of knowledge about insurance claims, contract laws, and relationships with local insurers to expedite your claim.


#2 Review Your Insurance Coverage

As you begin the claims process, it helps to review your insurance policy and start budgeting accordingly. Policies for vacation homes and investment properties will be different from a standard homeowners insurance policy.

Vacation homes typically need unoccupied property insurance if they are left uninhabited for 30 days or longer. A regular homeowners insurance policy will not cover damage if the property is empty for longer than 30 days, as risks such as water damage, burglary, and squatting become much higher.

There are some things an insurer may require before you can get unoccupied property insurance:

        ·        A security camera system to discourage theft;

        ·        Your plumbing prepared to prevent water damage, which can be much worse when no one lives on the property;

        ·        A friend or property management company who can make periodic visits to the property.

If you’re renting the property out, landlord insurance can cover property damage, landlord belongings (i.e., if it’s furnished), as well as loss of rental income. Landlord insurance is an effective way to protect all aspects of your investment.


#3 Get a Second Opinion on Your Costs

If you feel like the settlement offered by the insurer is too low, get your own estimates on the rebuilding costs. An insurance lawyer can arrange for a contractor or engineer to visit the property and provide a quote based on local rebuilding costs, which may differ significantly from what you’re used to.

Your estimates can then be presented to the insurer as a more realistic counter-offer.

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