Does house insurance have anything to do with rental inspection program?

[culinary99]

What is the name of your state (only U.S. law)? CA

I am renting out a unit in a city that require rental inspection program, I am just curious if I choose to ignore to participate in the rental inspection program, if something happen to my house (for example, fire) Will the insurance company deny my claim because of that? I have rental property insurance and umbrella insurance. Thank you.

 

[adjusterjack]

Will the insurance company deny my claim because of that?

You'll find the answer to that question in your policy. If an insurance company is going to deny a claim because you did or did not do something then that has to be specified in the policy.

Read your policy and find where it says that the insurance company can deny your claim because you don't participate in that inspection program.

Come back to this thread and report the results of your study.

 

[culinary99]

You'll find the answer to that question in your policy. If an insurance company is going to deny a claim because you did or did not do something then that has to be specified in the policy.

Read your policy and find where it says that the insurance company can deny your claim because you don't participate in that inspection program.

Come back to this thread and report the results of your study.

I see two section that I think might relate

"we do not insure for loss caused directly or indirectly by any of the following. such losee is excluded regardless of any other cause of even contributing concurrently or in any sequence to the loss.

a ordinance of law, mening enforcement of any ordinance or law regulating the use consuruction repair or demolition of a building or other structure, unless specifically provided under this policy.

 

[culinary99]

They also say something about concealment or fraud that involve in intentionally concealed or misrepresented any material fact or circumstances, does this fall into my category?

 

[Zigner]

What is the name of your state (only U.S. law)? CA

I am renting out a unit in a city that require rental inspection program, I am just curious if I choose to ignore to participate in the rental inspection program, if something happen to my house (for example, fire) Will the insurance company deny my claim because of that? I have rental property insurance and umbrella insurance. Thank you.

Your failure to have your unit properly permitted by the city may, in fact, cause problems with your coverage. More importantly, it's going to cause HUGE problems for YOU.

Participation is not optional.

 

[culinary99]

But it is just a self certificate program..
That mean I am the one who check and tell the government that it is ok..
I really find it have no relation to insurance but just wanna make sure

 

[Zigner]

But it is just a self certificate program..
That mean I am the one who check and tell the government that it is ok..
I really find it have no relation to insurance but just wanna make sure

What city and what is the name (or section) of the program/law/city code requiring it?

 

[culinary99]

What city and what is the name (or section) of the program/law/city code requiring it?

Hayward, CA

Thanks.

 

[culinary99]

Hayward, CA

Thanks.

residential inspection self certificate program

 

[Zigner]

Did you happen to look at the description of the program? The program clearly states that it is voluntary. It won't increase your insurance if you don't participate, but you may want to check with your agent to see if there are discounts available if you do participate. Please be aware that your failure to participate in the program will mean that you will fall under the mandatory inspection program that your city has.

http://www.hayward-ca.gov/sites/default/files/documents/Self-Cert_FAQ.pdf

http://cityofhayward-ca.gov/CITY-GOVERNMENT/DEPARTMENTS/CITY-CLERK/MUNICIPAL-CODE/ResidentialRentalInspections.pdf

 

[culinary99]

I did read those... my main concern is still the insurance... My tenant can't really stay at home at week day to wait for the one time that inspector come... that's why I felt if it doesn't affect insurance I might choose to ignore it for now...

 

[adjusterjack]

Good. I got you to read the policy.

I see two section that I think might relate

"we do not insure for loss caused directly or indirectly by any of the following. such loss is excluded regardless of any other cause of even contributing concurrently or in any sequence to the loss.

a ordinance of law, meaning enforcement of any ordinance or law regulating the use construction repair or demolition of a building or other structure, unless specifically provided under this policy.

That doesn't apply to your inspection program.

Where that comes in is when you rebuild or repair due to a covered loss and the local building code requires you to make code upgrades at an additional cost.

Your policy might or might not have coverage for code upgrades.

They also say something about concealment or fraud that involve in intentionally concealed or misrepresented any material fact or circumstances, does this fall into my category?

It might.

Examples:

1 - If, when you applied for the insurance, the application asked you if you participated in the inspection program and you answered yes, and then didn't participate and, at the time of the loss the insurance company found out that you lied on the application, your claim could be denied and the policy rescinded. The insurance company would have to show that participation in the inspection was material to the underwriting of your insurance. There are generally three ways to determine materiality. a - If you got a discount for participating in the inspection program, b - If the insurance company would not have written the policy without participation, c - If the insurance company would have limited coverage in some fashion without participation.

2 - If, at the time of the loss, you made false statement about anything that was material to the adjusting of the claim.

3 - And, the obvious example, if you committed (or had somebody commit) arson.

Otherwise, no, the insurance company would not deny a fire claim simply because you did not participate in the inspection program.

However, another issue is that an insurance company may be allowed to cancel or non-renew based on the condition of the property if the insurance company periodically inspects the property.

By the way, your "umbrella" policy has nothing to do with damage to your own property. Might want to read that one, too.

 

[Zigner]

I did read those... my main concern is still the insurance... My tenant can't really stay at home at week day to wait for the one time that inspector come... that's why I felt if it doesn't affect insurance I might choose to ignore it for now...

There is absolutely, positively, no requirement for you to participate. The program is there to help you and also to help the city (by freeing up the inspectors for other inspections.) It will not affect your insurance if you choose not to participate.

 

[Zigner]

Please read my responses and understand. Failure to participate in this program will not affect the OP's insurance at all. Why? Because the city is already inspecting the unit. The program is merely offered as a convenience to both the owner and the city.

Good. I got you to read the policy.



That doesn't apply to your inspection program.

Where that comes in is when you rebuild or repair due to a covered loss and the local building code requires you to make code upgrades at an additional cost.

Your policy might or might not have coverage for code upgrades.



It might.

Examples:

1 - If, when you applied for the insurance, the application asked you if you participated in the inspection program and you answered yes, and then didn't participate and, at the time of the loss the insurance company found out that you lied on the application, your claim could be denied and the policy rescinded. The insurance company would have to show that participation in the inspection was material to the underwriting of your insurance. There are generally three ways to determine materiality. a - If you got a discount for participating in the inspection program, b - If the insurance company would not have written the policy without participation, c - If the insurance company would have limited coverage in some fashion without participation.

2 - If, at the time of the loss, you made false statement about anything that was material to the adjusting of the claim.

3 - And, the obvious example, if you committed (or had somebody commit) arson.

Otherwise, no, the insurance company would not deny a fire claim simply because you did not participate in the inspection program.

However, another issue is that an insurance company may be allowed to cancel or non-renew based on the condition of the property if the insurance company periodically inspects the property.

By the way, your "umbrella" policy has nothing to do with damage to your own property. Might want to read that one, too.

 

[culinary99]

Good. I got you to read the policy.



That doesn't apply to your inspection program.

Where that comes in is when you rebuild or repair due to a covered loss and the local building code requires you to make code upgrades at an additional cost.

Your policy might or might not have coverage for code upgrades.



It might.

Examples:

1 - If, when you applied for the insurance, the application asked you if you participated in the inspection program and you answered yes, and then didn't participate and, at the time of the loss the insurance company found out that you lied on the application, your claim could be denied and the policy rescinded. The insurance company would have to show that participation in the inspection was material to the underwriting of your insurance. There are generally three ways to determine materiality. a - If you got a discount for participating in the inspection program, b - If the insurance company would not have written the policy without participation, c - If the insurance company would have limited coverage in some fashion without participation.

2 - If, at the time of the loss, you made false statement about anything that was material to the adjusting of the claim.

3 - And, the obvious example, if you committed (or had somebody commit) arson.

Otherwise, no, the insurance company would not deny a fire claim simply because you did not participate in the inspection program.

However, another issue is that an insurance company may be allowed to cancel or non-renew based on the condition of the property if the insurance company periodically inspects the property.

By the way, your "umbrella" policy has nothing to do with damage to your own property. Might want to read that one, too.

Thank for your information.