ORLANDO, Fla — “I got insurance thinking that I’d be covered for something like this,” said Leonidas Papakalos, a tenant at the Rialto apartment building in Dr. Phillips area of Orange County.
That’s the frustrating reality for many of the 400 central Florida renters displaced from two different apartment complexes. The Rialto on Sand Lake Road shut down last week. This week some residents had to move out of the Pebble Creek at Lake Mary apartment complex.
When emergency evacuations were ordered, people at the Rialto grabbed what they could and left. A week later, living expenses are adding up and renters insurance is top of mind.
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“Renters insurance coverage is going to vary by carrier,” said insurance expert Tom Cotton, the Executive VP of Arthur J Gallagher.
But Cotton notes most renters insurance will cover what’s called catastrophic ground cover collapse. That’s what most people think of as the large visible sink holes that can swallow buildings. But sinkholes, which are actually smaller, are part of optional coverage for renters.
Cotton said, “Sinkhole now is defined as minor settling and cracking.” The Florida legislature and the insurance companies changed the definitions several years ago.
So, if a renter has both catastrophic ground cover collapse and sinkhole coverage, there’s a strong chance they’ll be covered for loss of use for their apartment. Loss of use would pay for things like hotel stays, an increase in food costs and storage. The problem is loss of use typically only covers around 4% of their insured property value. So, for someone with $10,000 worth of stuff that would mean just $400 in their pocket.
If it’s a situation where natural causes are not to blame for structural problems, renters insurance likely won’t cover tenants at all. Structural issues not covered would be from the result of intentional neglect, improper construction or pre-existing conditions. That means renters at both the Pebble Creek at Lake Mary apartment complex and the Rialto are likely stuck waiting until the cause of structural issues is determined before insurance companies will settle their claims.
“Until an engineering firm does soil samples and borings around the building to make a determination, everyone’s going to be stuck in limbo,” Cotton said.
If people can’t ever go back in and get their belongings, they should get the full amount covered under their policy, not just 4% for loss of use.
If neglect or poor maintenance is to blame, tenants would have to go after the building owners to cover their losses since renters insurance wouldn’t cover it.
If someone is hoping to get a renters insurance claim for catastrophic ground cover collapse, they would have to have all four of the following elements:
- The abrupt collapse of ground cover
- A depression in the ground cover clearly visible to the naked eye
- Structural damage to the principal building insured under the policy, including the foundation
- The principal building being condemned and ordered vacated by the government agency authorized by law to issue the order
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