Renter's power strip ignites/LL's insurance wants payback

[Bob Kontak]

Pal/family rents stand alone house with his family. Power strip failure identified by firefighters as cause of ignition.

Smallish fire. $8k damage to structure. Landlord's insurance cuts check to landlord. House is being fixed and house is still being lived in. No bad blood between pal and landlord.

LL insurance (claims department) requests the $8k from my pal.

No renters insurance. Guy ain't got squat except maybe $10k in a 401k and three beater cars worth maybe $5k. Couches, chairs, bed and a tool box.

Given the insurance company will rationally take steps to mitigate their loss, how big are their teeth given it was not negligence and the dude ain't got squat?

[1990C4S]

He should be worried about his assets. I suspect they will come after him. My advice would be to sit tight, delay, delay, delay. And worst case I would offer them $1,000 and tell them if they don't settle for that amount then you will spend the remainder of your assets on legal advice.

An acquaintance of mine died in a similar circumstance. A power bar from the 'Dollar Store' ignited and burned his house down.

I'm pretty careful with the extension cords now. I only steal the good ones from my workplace.

[Bob Kontak]

Originally Posted by 1990C4S

He should be worried about his assets.

There has to be thresholds on reasonableness. You think they will make him sell his 99 Windstar or his 2000 Saturn?

They are not going to just forget about it.

The power strip failed. Alarm clock and a lamp plugged in. Lamp not on.

Does not remove him from all liability, it was his power strip, but it's different than him falling asleep in a drunken stupor and his dropped cig torches the house.

This has to be a state by state law issue. He will at least have his day in court if it comes to that.

Probably reduced settlement would be the least headache.

[1990C4S]

I suspect his scchitbox cars are safe, is his 401k protected from creditors?

[ckelly78z]

Who manufactured the power strip ? That where I would go if I were him.

[jyl]

Why is he liable?. There's no strict liability in this instance. He has to be negligent, before he's liable.

[Scott R]

Been through this type of event a few times with various tenants, in various buildings. Eight thousand with a good renter and I would probably just eat it.

I'll make a lot more than 8k off a renter over a span of time. You can't squeeze blood from a stone, but someone that pays on time and keeps a nice place, well that's sometimes priceless.

[Porsche-O-Phile]

Originally Posted by jyl

Why is he liable?. There's no strict liability in this instance. He has to be negligent, before he's liable.

You're technically correct I'm sure but to answer your question from a practical, real-world (and admittedly cynical) perspective he's liable because the insurance company says so and he won't be able to challenge their assertions. This is America - big corporations always win; they can squash you by simply bleeding you dry before you ever see the inside of a courtroom and they know it.

[MRM]

Lots of bad advice on this thread already. I assume this is Ohio? To paraphrase my favorite philosopher, Clint Eastwood, negligence ain't got nothing to do with first party property insurance coverage. However, unless Ohio is unusual, a landlord's insurer can't seek indemnification from the tenant. I don't know whether an insurer can in Ohio, but I'd be happy to look into it a bit and write a letter to the insurer for tenant pal. The insurer's better avenue is against the power strip manufacturer, but for $8,000, no company is going to start a products liability claim.

In general, every state certain assets are exempt. Usually about $4,000 equity in an auto, a few thousand in personal property, and a little for retirement accounts. Through a quirk of federal law 401(k)s are exempt property but Keoghs, self-directed IRAs and ROTH IRAs are not.

I have no idea what Ohio's laws are. The preceding was not legal advice. Anyone who is intelligent enough to be able to read my post is deemed to be too intelligent to act on anything I wrote. Consuming information in this thread within 30 minutes of a meal creates a drowning hazard and swimming is not recommended until you awake from a nice long nap. If you are still reading this post without your head splitting in two, you are advised to check out some old Monty Python skits on YouTube where you might actually receive some helpful information.

[pcardude]

I was waiting for MRM to pop in on this thread. Dude knows his schizzle guys

[bpu699]

Landlord here. Just had a flooded apt, cause unclear. Possibly loose toilet or tenant doing something... Who knows...

$15,000 payout, and the insurance didn't ask the tenants name...

Can't believe someone above suggested the landlord get dragged into it or say the power cord belonged to the building... Shame on you...

Someone else suggested the landlord eat the $8000. Seriously???

Tenant burned down the area. He may or may not be on the hook...


I have judgements against tenants from $1000-$100,000 dollars. Getting a judgement and collecting are 2 very different things. Most tenants are judgement proof... Most landlords, and insurance companies, know that...

Peace.

[wdfifteen]

Assuming a UL listed appliance being used as intended. Sounds like the insurance co is trying to grab some low hanging fruit, hoping your friend will be intimidated and pay up. You should both point to to the manufacturer of the power strip.

[Porsche-O-Phile]

It was a "dollar store" power strip - is there any chance at all the company is still actually in business here or was it (more likely) some Chinese, never-heard-of brand who set up a U.S. presence out of a P.O. Box in San Fran five years ago to import maybe a dozen shipping containers worth of cheap crap but now is MIA and nobody knows if they even still exist as a legitimate business at all?

[greglepore]

Good advice upthread. Did subro for a while. They likely know tenant has no liability, just trying to make sure he's scared enough to cooperate.

Without giving legal advice, which I'm not, he should just tell them to pound. Unless he knows the manufacturer of the strip, which is who they're really looking for.

[wdfifteen]

Originally Posted by MRM

unless Ohio is unusual, a landlord's insurer can't seek indemnification from the tenant.

There is a term for that. The word doesn't come to mind at the moment. Landlord's insurance pays for his loss, tenant's insurance pays for his. I don't know if it is law in Ohio, but it is in all my leases. My insurance co approves, says it is common and fine with them. Check your lease.

[Scott R]

Originally Posted by bpu699

Landlord here. Just had a flooded apt, cause unclear. Possibly loose toilet or tenant doing something... Who knows...

$15,000 payout, and the insurance didn't ask the tenants name...

Can't believe someone above suggested the landlord get dragged into it or say the power cord belonged to the building... Shame on you...

Someone else suggested the landlord eat the $8000. Seriously???

Tenant burned down the area. He may or may not be on the hook...


I have judgements against tenants from $1000-$100,000 dollars. Getting a judgement and collecting are 2 very different things. Most tenants are judgement proof... Most landlords, and insurance companies, know that...

Peace.

That's why I said "eat the 8k" it' not worth it in the long run, "seriously." Unless your lawyer is a lot cheaper than mine, 8k is nothing in the grand scheme of things. And collections on judgements? Please. On that I agree with you, you will never see a dime.

I would rather fix my property and move on. God help you if this was a section eight unit BTW.

[bpu699]

Section 8 must be very different in each state...

I love section 8, actively seek it out, and do really well on it. Screen tenants well, same criteria if non section 8...

Little secret. Section 8 pays the same whether the house is $50,000 or $500,000. Use math to your advantage. You get paid... no questions, every month...

Just bought 5 more units in the last 5-6 months...

[Laneco]

Just this past week, we had a power strip melt... It was a good quality strip. The circuit breaker itself was bad. The "smoking gun" was the melted power strip and it would have been easy to point fingers at that, but that wasn't the root problem. The brand new circuit breaker (newly built house, less than one year old panel) was bad.

I wonder if the insurance company hired an electrician to ensure that no problems existed with the wiring in the house or just blamed the point of ignition which was the power strip. It may not necessarily have been the problem.

angela

[Scott R]

Originally Posted by bpu699

Section 8 must be very different in each state...

I love section 8, actively seek it out, and do really well on it. Screen tenants well, same criteria if non section 8...

Little secret. Section 8 pays the same whether the house is $50,000 or $500,000. Use math to your advantage. You get paid... no questions, every month...

Just bought 5 more units in the last 5-6 months...

Just wait.

[wdfifteen]

Originally Posted by greglepore

Good advice upthread. Did subro for a while.

"Subro" = subrogation?
That's the term I was looking for.