If you’re a landlord or property investor, choosing between a fixed-term and periodic lease is a big decision.
Each type of lease has its pros and cons, affecting your rental income, tenant stability and how easily you can manage your property.
But did you know the type of lease you choose can also impact your insurance claims process? Specifically, it can impact how a loss adjuster handles your claim.
In this article we will explain fixed-term and periodic leases in simple terms, break down what a loss adjuster is and show you what a loss adjuster does when managing claims for these types of leases.
Fixed–term Leases: Stability and Certainty
A fixed-term lease is an agreement between you (the landlord) and your tenant for a set period—usually six or twelve months. This type of lease gives both parties clear expectations about how long the tenant will stay and how much rent you’ll receive during that time.
Fixed-term leases are popular because they offer financial security. You know exactly how much rental income you’ll get each month, making budgeting easier. Tenants also benefit from knowing they have a stable home for the agreed period.
On the downside, fixed-term leases aren’t very flexible. If you or your tenant need to end the lease early, it can be complicated and sometimes costly. Also, you can’t raise the rent until the current lease ends.
What is a Loss Adjuster?
When something unexpected happens—like storm damage, fire, flooding or tenant related damage—you’ll probably need to make an insurance claim. When you do this, your insurer will often appoint a loss adjuster to manage your claim.
A loss adjuster is an independent professional who investigates insurance claims on behalf of insurers. Their job is to figure out what happened, assess the damage and decide if your claim fits within your insurance policy coverage. They act as a neutral party between you and your insurer to make sure claims are handled fairly.
Periodic Leases: Flexible but Less Predictable
A periodic lease (often called month to month) doesn’t have a set end date. Instead, it continues until either you or your tenant gives notice to end it. This type of lease offers flexibility because either party can end the agreement with relatively short notice.
Periodic leases allow landlords to adjust rents more frequently according to market changes. They also make it easier to sell or renovate your property because you’re not locked into long-term agreements with tenants.
However, periodic leases come with some risks too. Tenants can leave quickly with short notice (usually 14-21 days depending on your state), meaning you could lose rental income suddenly. Frequent tenant turnover can also make managing the property more challenging.
What Does a Loss Adjuster Do?
When you lodge an insurance claim for property damage or loss, insurers will usually send out a loss adjuster to handle it from start to finish.
The loss adjuster’s role includes visiting your property to inspect damage, talking with tenants or witnesses if needed, reviewing tenancy agreements and other documents, and determining what caused the damage. After investigating thoroughly, they prepare reports for the insurer outlining their findings and recommending how much should be paid out under your policy.
Loss adjusters don’t take sides—they remain neutral throughout the process. Their goal is simply to ensure claims are settled according to policy terms.
How Your Lease Type Can Affect Insurance Claims and Loss Adjusters
The type of lease you choose—fixed-term or periodic—can affect how smoothly insurance claims are handled by loss adjusters.
With fixed-term leases it’s usually easier for loss adjusters to investigate claims because tenancy periods are clearly defined. If there’s tenant related damage during a fixed-term lease, it’s usually simpler for the loss adjuster to determine responsibility since occupancy dates are clearly documented.
With periodic leases there’s more frequent tenant changes. This means loss adjusters may have a harder time figuring out who caused certain damages if multiple tenants lived in the property over short periods of time.
To help loss adjusters handle claims with periodic leases landlords should regularly document property conditions through inspections and keep clear records of tenancy agreements.
No matter what type of lease you choose, keeping good records will help loss adjusters assess claims quickly—saving everyone time and stress.
Tips for Working Smoothly with Your Loss Adjuster
To make sure things go smoothly when dealing with a loss adjuster:
Be proactive about keeping detailed records of property conditions before and after each tenancy period. When making an insurance claim, provide these documents quickly so the loss adjuster has all necessary information upfront.
Make sure you’re available when the loss adjuster needs access to inspect your property or ask questions about what happened.
Communicate clearly about any details related to the claim—this helps speed up their investigation process significantly.
Working cooperatively with your appointed loss adjuster ensures faster resolutions for your claims—and quicker payouts from insurers too!
Key Takeaways
- Fixed-term leases offer financial predictability but less flexibility; they’re easier for loss adjusters due to clearly defined tenancy periods.
- Periodic leases provide flexibility but can lead to unpredictable income; they require more thorough documentation for smoother insurance claims.
- A loss adjuster is an independent professional appointed by insurers who investigates claims fairly.
- Keeping detailed records of property conditions helps loss adjusters handle claims faster regardless of lease type.
- Clear communication and cooperation with your appointed loss adjuster ensures quicker resolution of insurance claims.
At Duo Insurance, we understand landlords’ unique needs around leasing decisions and insurance claims management.
Our team works closely with experienced loss adjusters so that when unexpected events occur at your rental properties—you have peace of mind knowing everything will be handled quickly and fairly. Contact Duo Insurance today for a free consultation.