If you own rental property, you’ve probably asked yourself this at some point:
That’s a fair question. And I’ve got a real answer for you — not a generic insurance-company non-answer.
I ran two years of internal claims data on approximately 800 investment property policies for one of the carriers we represent here at Hopmeier Evans Gage. What I found tells a very clear story. In that two-year window, just 53 claims generated over $1 million in paid losses.
Fifty-three claims. One million dollars.
So if you’re not the one filing claims, you’re paying for someone who is. That’s just how insurance works. But the good news is, most of these losses were preventable — and knowing what drives them puts you ahead of 90% of landlords out there.
Here’s the breakdown.
#1 — Water Claims: 30% of All Incidents
Water was the most frequent claim in our data, representing nearly a third of everything we saw. And it shows up in a few different ways:
- Leaky or damaged roofs after storms
- Tree branches falling on the roof
- Water backing up under eaves (usually minor)
- Failed water heaters
That last one is where the real money goes. Our largest single water claim was $75,000 — from a water heater that rusted out from the bottom and flooded the interior of a multi-unit home. Seventy-five thousand dollars in damage from a piece of equipment you can replace for a few hundred bucks.
What to do about it:
- Replace water heaters proactively. At 13 years, start planning. At 15 years, stop waiting.
- Install drain pans under any water heater above basement level and route them to drain outside.
- Trim trees around your structures on a regular schedule. This one move cuts both water AND wind claims.
#2 — Wind Claims: 22% of All Incidents
Wind came in second, accounting for about 22% of our claims. The pattern is consistent: branches, limbs, and dead trees make direct contact with roofs, siding, and HVAC equipment.
The biggest wind claim in our data? $122,000. That was a larger commercial-style building where high winds peeled the entire rubberized membrane roof right off the structure. A complete re-roof on a commercial building isn’t cheap.
What to do about it:
- Walk your properties regularly. If a tree looks questionable, it probably is — take it down before it comes down on its own.
- Remove large limbs overhanging or directly adjacent to the building.
- Do this at your own home too. Same risk, same fix.
#3 — Fire Claims: Only 11% of Incidents — But 55% of the Dollars
And here’s where it gets real.
Fire was the least common cause in our data — just 11% of claims. But those 11 fire claims paid out over $500,000. That’s more than half of all claims dollars over two years, from less than a dozen incidents.
The common culprits:
- Kitchen fires, especially grease fires from cooking
- Lithium-ion battery fires — specifically from cheap, uncertified chargers bought online that overheat and ignite
We had one fire that caused $70,000 in damage traced back to an uncertified charging unit. As more tenants use e-bikes, scooters, and off-brand electronics, this is only going to come up more often.
One of our most significant fire claims was a $350,000+ loss in an Albany apartment complex caused by a tenant. The fire caused nearly $380,000 in smoke and water damage to the rest of the building. We insured the tenant in that case — which brings me to the most important point in this entire article.
The single most effective thing you can do:
Require renters insurance in your lease. Every tenant. No exceptions.
Minimum $300,000 in liability coverage. This protects you when your tenant’s negligence — a grease fire, a cigarette left burning, a dog bite — causes damage to your property or injury to someone else. It doesn’t eliminate your exposure, but it puts another layer of coverage between you and a catastrophic loss.
If you’re not currently requiring this, start with your next lease renewal.
The Bottom Line
You may not be filing claims. But someone in your pool of insured landlords is — and these numbers show exactly who and why. The good news is that wind, water, and fire losses are largely preventable with basic maintenance, smart property management, and the right lease terms.
If you’d like us to review your rental property coverage — whether you have one unit or twenty, short-term or long-term, Airbnb or traditional lease — give us a call. We’ll look at what you have, tell you what we see, and make sure the coverage actually does what you think it does when you need it.
Wrong coverage is never a bargain.
Dave Evans, CIC
Hopmeier Evans Gage Agency | Schenectady, NY
Call, text, or email — we’re easy to reach.