A client who believed they had acquired something, but it turned out they never actually had it, gave rise to this Smart Tip for understanding Insurance claims for landlord package policies.
For landlords, essentially.
Therefore, if you own a rental property, this is something that actually affects you.
However, it serves as a reminder of how the market has evolved, as well as how policies are being advertised and shown. I’m also learning about this for the first time; it’s a frightening policy that I was able to review with an absurd result.
Let’s now take a look at the Allstate Landlord Package Coverage…
…often known as the AS84 and often referred to as their “all-risk” or “better” policy because it covers more risks.
The real test is: “We will cover unexpected and unintentional direct physical loss to property described in the description below.”
This is the standard language for what is known as an “all-risk” policy, which means that only the exclusions apply and that we cover everything else.
In light of this, if you look at the AS84, you could think, “I have an all-risk policy, I have a very excellent landlord policy, I should be covered for many things,” including wind and rain, accident discharge type losses, which likely make up the majority of losses. But this policy contains something truly absurd.
Additionally, it has a certification, known as the AS839. This endorsement completely strips the policy of all its complexity and is by far the worst.
As a result, it only protects against fire, lightning, wind, and hail when there is a required opening, which means that something had to be torn off before interior damage was covered. Explosions, automobiles, aircraft, smoke, easily broken glass, and outside burglary damage.
The significant omission, in this case, is the unintentional water leak. You’ll also observe that it is extremely constrained.
So, instead of covering everything in the world, you are now only covering nine things. And mainly because you’d need that physical aperture, it winds and rains. And the majority of houses lack that. So, this undermines what is widely seen as a good policy to the lowest level.
It’s actually on the deck page, although it’s difficult to see. It’s the last mention on the list. And it demonstrates that AS839 is an attachment to this policy.
If you buy an all-risk policy, you wouldn’t imagine you could change it to a basic coverage with only one endorsement, yet that’s exactly what they did. As a result, in this instance, the landlord, who had thought they had excellent coverage, actually has very poor coverage.
You thought you had it, but you didn’t; I call this the fundamental three-card switch.
To avoid having a policy that starts out as all-risk and then is reduced to a simple form later, read all of the endorsements that are linked to the commercial insurance you are insuring very carefully.
Email us at faq-info@majoradjusters.com if you liked this quick tip. Once again, many thanks. Enjoy your day, and I hope this was useful.
