CATHERINE M. MATTHEWS (R), GRI
Broker-In Charge, Callahan Realty, Ltd.
Past President, Oahu Chapter
National Association of Residential Property Managers
Q. We had thousands of dollars worth of damage to our rental townhouse in Kaneohe from the hail and big rain last month. We had purchased homeowner’s insurance and felt that we were covered for any problems. We were very wrong. What can you advise?
A. You were not the only property owner affected by that storm – many people had damage that was not covered by their policies. A standard homeowner’s policy, even a great one, has exclusions. Flooding is a standard exclusion. For most policies, had the roof been damaged and the water entered through the roof damaging floors, walls, contents, etc., the policy would have provided coverage. A partial definition of flooding from FEMA and the one that applies to most of the recent uninsured problems in Kaneohe is “unusual and rapid accumulation or runoff of surface waters from any source.” Basically, the way it was explained to me is that if the rain hit any surface other than the property before entering the property it is a flood. If the rain hit the ground and came in, then it is a flood. To be classified as a flood, the water also has to affect two or more adjacent properties.
Flood insurance is available for purchase even if your property is not in a mandated flood zone, and it is not very expensive. Many people choose not to get flood insurance when a property is not in a flood zone for different reasons — for example, they don’t think about the actual definition of a flood or they think the chance of having a flood is too slim or the thought never even crosses their mind. Having a 4 inch downpour in 20 minutes is out of the ordinary for us in Hawaii; so is having a hail storm or a tornado, but we did have all three in one weekend.
Another related consideration is mold. Does your policy cover mold? In some policies it is totally excluded, while, in others, it is covered up to a maximum amount of damage.
Insurance is for the unexpected and the inevitable. It is very important to talk to your insurance agent – ask questions, specific questions, not only about coverages but exclusions. Take the time to read your policy thoroughly. The policies do tend to be long but are generally written in easy-to-understand language. If there are parts that aren’t easy to understand, or if you are unsure about the meaning, ask your insurance agent. If your agent cannot take the time to explain it to you or does not understand himself (or doesn’t get back with you if he needs to look something up), my advice would be to get a new insurance agent. Be proactive in your relationship with your insurance agent, let them know you want to be informed and aren’t necessarily looking for a bare bones minimum policy if that is your case. Agents can advise you best if they know what you want. They can let you know about items that you may not realize are available if they know you are looking for more information.
Answers to questions in Landlord Tenant Q&A are provided by members of the Oahu Chapter of the National Association of Residential Property Managers (NARPM), an organization that supports the professional and ethical practices of rental home management through networking, education, and certification. The Oahu Chapter, founded in 2004, has become the largest in the nation with 175 registered members.
Disclaimer: The answers provided in this column by Realtors address individual cases and should not be construed as interpretations of the law. For specific information on Hawaii State Law, go to http://hawaii.gov/dcca/areas/ocp/landlord_tenant or contact an attorney.