Q: Are we entitled to additional loss of use payments from insurance for unit delays in CA?
Plumbing inside the condo unit above caused water damage to our rental unit below. The insurance company for the responsible party agreed in early October 2024 that their insured is responsible and requested repair estimates, which we provided on October 4, 2024. After allowing 2 months for payment to start repairs, we moved the tenant out in December. However, due to delays and now denial tactics, the insurance has not paid, resulting in our unit sitting empty for January and February without rental income. Additionally, the repairs have not been conducted yet, meaning more loss of use during construction time. The insurance claims they will only cover construction time loss, not the additional loss due to their delay. Is their stance correct?
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- California
- (916) 704-3009
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- Answered
A:
In California, you generally have a right to recover loss of use damages, including lost rental income, when another party's negligence causes damage that renders your property uninhabitable. These damages typically cover the reasonable amount of time it takes to repair the property, starting from when the loss occurs and continuing through completion of repairs.
However, if the insurance company's unreasonable delays or refusal to pay caused additional time where the property was unusable, you can argue that the insurer's conduct contributed directly to these extended losses. California law supports recovery of damages arising from delays caused by an insurer's bad faith, unreasonable handling of claims, or refusal to provide timely payments for agreed-upon repairs.
You should document clearly all communications, the timeline of events, the insurer's delays, and your efforts to mitigate losses. Presenting this evidence can strengthen your position to recover additional loss-of-use damages beyond just the construction period. Consulting with a local attorney experienced in insurance disputes can also help clarify your rights and ensure that you receive fair compensation for your losses.
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