My rental burned down and now the insurance won’t pay, what can I do?  7 steps to avoid this problem.

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My rental burned down and now the insurance won’t pay, what can I do? 7 steps to avoid this problem

Indy Anna Explains:
– We just had a real “nightmare” scenario where an investor was about to flip his house and it burned down just days before closing and the insurance company won’t pay for it, what can be done?
– What real estate investors need to know about insurance and how one wrong move here could destroy your entire business, no joke!
– Plus I’ll show you the BEST seven ideas I got on how to make sure that this never, ever EVER happens to you!

So here’s what happened:
– I had assigned a deal to an investor, he bought it, closed it, did the work, got a buyer to re-sell it to and was about to close for a retail price of $210,000.
– Then just about 72 hours before closing there was a fire and the house is toast.
– The investor had insurance so we all assumed everything would be covered but NO the insurance company is refusing to pay for this.
– I’ve never seen this but I asked around and it looks like this has happened and does happen to investors so this is a problem for some people.
– I’m making this class to make sure this never happens to you or anybody you know so please pay attention and also let me know if there’s something I’m missing or anything you think should be added to help.

So what happened, how can the insurance company turn down a claim like this?  To find out I spoke with four realtors, two attorneys, at least 10 investors and a few insurance agents so that I could have a complete answer.
– As a real estate investor you need to be VERY clear and specific the use of the property and your insurance agent, realtor and/or attorney should get you the right policy but just in case you should know about the vacancy clause.
– So in this case my investor got a standard “Landlord’s Policy” and usually those state that the property can only be vacant for a specific time like 30, 60, 90 days or so.  In this case because of Covid the property was vacant for longer than that so the insurance company is trying to get out of paying.
– As a flipper/investor you want to have a “Builder’s Risk Policy” and also the terms of use of the property clearly outline and if something like Covid comes up your agent can create or add an addendum to the policy so that the company knows the situation.
– In researching this I also had another investor that had weather damage on a rental and the insurance company refused to pay for it because the tenant had two dogs instead of just one that was in the original lease four years ago crazy pants!

In this deal with the investor he paid me a $15,000 assignment fee and I went to return it because I felt so bad but Ronnie was NOT having it and just wanted to do the next deal so YAY for the winning attitude Ron!
– And Ron has a good income and good financials and I already have a good deal or two for him so he will be okay, but for a normal investor this one deal could’ve wiped them out entirely.
– That’s why I want to get to the bottom of it and make sure I have solid answer for you guys, so everybody I talked to said it is the insurance agent’s fault and the insurance agent says it is the law and there’s nothing he could’ve done about it.
– I don’t want to point fingers but to improve our Policies here we have to get clear on how to avoid this in the future.

I worked with a few people from different backgrounds of the industry to come up with these Policies and Checklist.  So here are SEVEN tips that should help you avoid this from ever happening to you:

1.)  Explain what you are doing.

Do NOT assume your insurance agent is on your side or is at fault first blame yourself and make sure you are asking the right questions and explaining the full situation to your agent about what is happening with the property.

2.)  Ask for referrals.

Instead of just getting an insurance agent, make sure you have your team in place working together.  You want your realtor, lenders, property managers, other investors, insurance agents, etc. to be familiar with real estate investments and be real estate investor specialized people.

3.)  Specify Investor Category.  

There are different policies for landlords, short term rentals, long term rentals, flips, rehab, new construction, assignment, partly owner-occupied, vacancy, multi-tenant, wholesaling, etc.  Make sure your agents know the differences and has written a policy for your specific use.

4.)  Give your agent and company a schedule.  

Make sure they know exactly what you plan on doing (work, rehab, tenant signings, etc.) and WHEN. This way on any given day of any given week they already know what is happening and your policy was written to protect you for the specific use you outlined.

5.)  Tell your insurance agent of any changes.  

If you are behind schedule, ahead of schedule, doing showings, signing tenants, etc. make sure the agent knows everything and any change in status and especially regarding things like vacancies.  

Even if it is an obvious change like with Covid, hurricanes, forest fires, etc. that would obviously impact your work or schedule you should still make sure the agents knows and any necessary adjustments are made.  Any vacancy clauses for example, should be updated.

6.)  As you market a property or sign a tenant update your agent.  

If people are coming in and out of the property or if there is a change in the previous “unoccupied” status and you are renting the property let them know.  Sometimes taking fees, security deposits or even just marketing a property may have to be within a timeline or it may trigger a need for an update on the policy or notification to the company.

7.)  Meet at the property and/or provide pictures.  

You can include these pictures with the schedule as well and it makes it crystal clear what you are doing with the property.  This is also helpful with your realtors so they can see the value changes and updated that they can emphasize as they market the home.

Thanks so much!  = )

Okay so that was the best 7 ideas that my people came up with to help you avoid this from even happening to you.

Make sure you stay here at and check out our EPIC page on 100 FREE ways to find motivated sellers and our other amazing training resources will help you become a Jedi and creating Income Ascension and Social Mobility and you will…

Make the Universe Smile.

Want more (brilliantly) EPIC posts of real estate investing and bidness badasssery...?

There is a great post and class on the 38 Ways to Buy Apartment Buildings Zero Down with Pet Policies, and here are some other helpful and EPIC posts... for starters as a real estate investor if you ever want to build a business that makes you 30 grand a month then you MUST do this...

Wanna Create Generational Passive Income Buying Real Estate and Small Businesses?

Here's a class on exactly how to make $30,000 in passive income as an out of state Indy landlord.  Exactly how many Indiana rental properties do you need to make 30 grand a month.  Anna can you help me invest in Indianapolis turnkey real estate investment properties?

There's also a great class Azam did on how anybody can retire in the next 1-2 years with $30,000 a month in passive income by buying and selling businesses zero down.  What about Micro Flipping?  We have a great class on how to start micro-flipping real estate zero down from your house and make $500/day, speed wholesaling 101.

There’s also another great class on how to buy apartment buildings zero down that you can check out as well.  This relates directly to growing income on rental properties.  Speaking of which make sure to check out our epic page on 14 ways to avoid tenants from hell.  Also we have a great post on how to make build a "six figure a month" real estate wholesaling business.

Also here is a post on how I did this and I flipped a house off Zillow for 30.  Also you can check out the post on five steps to flip a house right off Zillow for 40 grand.  You can also check out our other epic post on 57 ways to make money with vacant land.

Here’s another post on how a Hero flipped a house off Zillow and made 40k in a few weeks while he was learning to read.  Also you want to check our post on the EPIC $25 million letter and the copy writing lessons for real estate investors, you'll love it.  Also you can see how ONE letter is making me $9,000 a month.  Also you can check out the post on 101 FREE places to advertise your houses.

Also check out the "SA" class and your REAL chances of create social mobility and income ascension with your real estate business.  Brilliant stuff.  Also there is a great post on the ONLY way you'll ever make 30 grand a month as a real estate investor and/or business builder.  Another brilliant class with a free downloadable Investor Guide is about 19 Ways to Make $10,000 a Month by Helping Tired Landlords.

Plus make sure you check out Azam's post on how to hire a realtor that makes you $10,000 a month... while you sit back with your shoes kicked up on your desk and fingers folded behind your head.  Also there is a great post on how to make five grand a week from putting out signs.

Also we have some great posts on 30 ways to buy real estate with no money down.  That is a two part series so make sure to watch the second part on the 30 ways to buy real estate zero down and with no loans or credit.  I also get questions about our "Epic Flipping" and how to turn $1 into over $25,000 by flipping ordinary items for exponentially high ROI.

And don’t forget our EPIC page on 100 FREE ways to find motivated sellers, we are making the number one page in the world on FREE ways of finding motivated sellers.  Also check out how I find motivated sellers from code violation properties, and also how I make over $1,500 a week giving investors access to that list

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When I first go started I thought wouldn't it be great if somebody put together ONE list of every possible contact that I would ever need to build a passive income with Indiana real estate - or any Midwest real estate?  Well that's exaclty what I did with our “People Page” here it is:

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Stay here at and you’ll become allergic to being an LC and addicted to improving the world and creating Income Ascension and Social Mobility for you and yours… 

Thanks so much!  = )

Make the Universe Smile.

~ Indy Anna
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100 FREE ways to find motivated sellers.

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100 FREE ways to find motivated sellers.