Do you have some loose or missing shingles on your roof? Are your gutters pulling away from the house causing rain to pool at your foundation? Got any annoying leaks in your kitchen or bathroom? Or is there a bit of mold on your bathroom ceiling because of the steam of long hot showers?
If you have any of these, or other things that need to be fixed around your home, you’re not alone. Homeowners often learn to live with certain problems around their house, promising themselves they’ll get around to it eventually, for any number of reasons, such as:
- They just don’t have the time to fix things.
- They don’t have the ability to fix things on their own.
- They can’t spare the money it’ll take for materials or to pay someone to fix it.
- It can be difficult to find a contractor who is responsive or willing to deal with smaller jobs.
- It’s not all that appealing to spend money on things that don’t have a “wow” factor, or give you pleasure, like new kitchen or bathroom renovation.
Unfortunately, ignoring smaller issues around your home can snowball into a bigger problem than you might think. Especially, if you are a landlord and you have tenants living in your property.
Insurance Covers Unexpected Events… Not Ones You Let Happen
According to Simply Insurance, recent statistics show that over 95% of U.S. homeowners have homeowner’s insurance. This is in part due to the fact that it just makes good sense to protect yourself from large catastrophic losses, but it’s also in large part due to the fact that anyone who has a mortgage is likely required to have homeowner’s insurance by their lender. (In fact, if you don’t maintain payments on your own policy, they’ll buy a policy of their choice and make you pay for it… and it’s usually more expensive than one you would have gotten on your own.)
If you are a landlord, you also need to have landlord insurance which typically includes two different types of coverage: property and liability protection. Both coverages are intended to help protect you, the landlord, from financial losses.
So, while you might be aware that the longer you ignore problems with your house during the time you are living there, the more damage can be done, you might be comfortable taking that risk, since you most likely have insurance. Some people might even think that putting it off until it gets even worse and causes major damage could work to their advantage, thinking they can just file an insurance claim and get the work paid for that way!
However, if you are a landlord, and have tenants residing in your property, that is not a risk worth taking. While landlord insurance helps pay to repair your rented home, condo or apartment if it's damaged by fire, lightning, wind, hail or other covered losses; It also helps to pay for helps pay to repair detached structures on your rental property, such as detached garage or fence, if they're damaged by a covered loss.
Not to mention, if your tenant falls downstairs at your rental property and a court determines that you failed to maintain the stairs and/or railing, you could be held responsible for your tenant's medical, legal and other costs. In that case, your landlord liability coverage may help pay for those expenses, up to your policy's limits. You typically won't pay a deductible for a liability claim.
While it might be appealing to get your money’s worth from your homeowner’s policy, it could easily backfire and cost you more than just taking care of issues before they get worse. Kiplinger recently published an article about how delaying repairs can actually put your homeowner’s insurance policy at risk. Within the article, Beth Riczko, president of Nationwide’s P&C Personal Lines was interviewed and said:
“As a homeowner, it’s important to protect your property from further damage when there is a known issue. When a claim is filed, there are many factors reviewed during the investigation that may impact whether the claim is covered, including if the insured followed policy conditions. For example, when shingles are damaged on a roof and aren’t repaired causing interior damage, there could be coverage impacts.”
In other words, not only will your insurance not cover the loose roof shingles the homeowner ignored for some time, they won’t cover the damage done to the inside of the house because of it! So the homeowner now has to pay for the roof and all of the interior damage. On top of that, now that the insurance company is aware of the issue, they may demand that you fix the problems immediately, or threaten to cancel your coverage, and just having tenants in the property just opened a new can of worms.
So if you notice that work needs to be done around your house, and it’s something your insurance company or their adjuster could reasonably expect that you would have noticed and ignored, you ought to take care of the issue before it becomes a bigger problem. Here are a few tips on how to fix any issues you come across:
- If you’re handy, roll up your sleeves and get it done. No matter how busy you are, carve out some time as soon as you become aware of an issue, and BEFORE YOU TAKE ON TENANTS.
- Not handy? Perhaps it’s easier than you think to become handy! Check out some how-to videos on YouTube; you’ll be amazed at how easily some things can be fixed with a little know-how you can find for free online. BEFORE YOU TAKE ON TENANTS.
- Find a contractor or “handyman” you can rely on in your area. Ask friends for recommendations, or look at local forums on social media to find posts about who people recommended and hired in the area. It’s not only a good way to find out who you can trust to do good work, but also to hear from other people about how their pricing is. BEFORE YOU TAKE ON TENANTS.
- Reach out to your favorite property manager. He or she can be an incredible source of information on who to hire, and might even have some insights into how to add some pizzazz or value to your home when getting the work done. BEFORE YOU TAKE ON TENANTS.
The Takeaway:
If you have some minor issues around your house that you’ve been ignoring, make sure to address them as soon as possible and before you take on tenants. Otherwise, your homeowner’s insurance and landlord insurance may not cover any bigger damage that is caused due to you not fixing the smaller issues over time. Remember, everything in the property needs to be working as it was intended to work, before a tenant takes occupancy.
