As a property owner in the Greater Chicago Area, one of the most dreaded calls to receive is the report that there’s been an apartment fire in one of your buildings. The first concern is that no one has been injured, but next on your list is the extent of the damage and who bears the responsibility for the cost of repairs. Hopefully, you have never had to deal with this situation, but having the right information and coverage beforehand will prepare you if the worst should happen.
Your Responsibility As a Landlord
The bottom line is that landlords are responsible for any fire damage to the building regardless of who is at fault. Thankfully, the landlord’s homeowner’s policy covers the cost of repair and remediation and in most cases, the landlord is not personally liable unless the fire was a direct result of neglect. That does not mean, however, that the landlord’s insurance will cover content damages — the damage or loss of the tenant’s possessions in the apartment. Homeowner’s insurance coverage in the landlord’s case applies to the structure alone.
The Tenant’s Responsibility
In the case of an apartment fire where the fault lies with the landlord, renter’s insurance will reimburse tenants for their damaged or lost items after their deductible is met. If the fire was caused by the tenant or guest of the tenant, the landlord will still have to file an insurance claim, but the company will then work with the tenant’s insurance to recover the costs or reach some sort of agreement about who pays for the specific damages incurred.
If the tenant does not have renter’s insurance, the landlord’s insurance company may try to recoup the cost of damages directly from the tenant if he or she is clearly at fault. Many landlords choose to write a clause in the contract stating the responsibilities of the tenant if they choose not to carry renter’s insurance.
To prevent the possibility of an apartment fire, make sure your electrical and heating systems — along with any appliances — are up to code and functioning properly, and that your tenants are clear about fire safety rules.