You've got questions, we've got answers!
We've put together a list of frequently asked questions and answers to help you better understand CRERDI®'s coverage.
What is CRERDI®?
Commercial Real Estate Default Rent Insurance (CRERDI® /kr-'err-di/), is an innovative coverage for commercial property owners in the US who wish to protect themselves from the risk of their tenants being unable to pay their rent.
Coverage includes up to six months of lost net rent, allowing property owners to start the eviction process without giving up 100% of the rental income, as well as reimbursements of legal expenses associated with the eviction process.
CRERDI®, can also provide reimbursement for the tenant's leasehold improvements once the tenant is removed.
Can more than one property be insured?
Yes. There is no limit to how many properties can be insured. Coverage is available to all commercial properties regardless of the property size or annual net rental income.
Property owners can have multiple properties under one policy through a scheduled location.
Only one coinsurance percentage may be selected per policy. That coinsurance percentage will be used for all covered units for both Rent Insurance and Tenant Improvements Coverage. The Named Insured is not allowed to pick different coinsurance percentages for each covered unit.
What if I am an owner user (owner occupied)?
If the property is a multi-unit property, and one or more of the units is occupied by the property owner and leasing the other units, coverage will be available only to the leased units that are not occupied by the property owner, subsidiary, or affiliate with the property owner.
When applying, all units has to be listed, including property owner's occupied unit(s). However, we DO NOT CHARGE premium for these units.
CRERDI® is not coverage that can be used for leasing between subsidiaries or affiliates. If one subsidiary or affiliate of a corporate family fails to pay another company that is owned by the same corporate family, it does not count as a customer nonpayment loss. That is an internal corporate issue, not an issue between a tenant and the property owner. The same applies to owner occupied. Nonpayment of rent between a tenant's subsidiaries or affiliates is excluded from coverage.
Other similar exclusions are:
- An entity that is controlled by the property owner or property owner's agent(s), either majority or fully.
- Any entity where the property owner have an interest in that entity, such as..
- sister entity
- parent entity
- family members owned entity
- or any related individual(s) to the property owner.
What is tenant's leasehold improvements?
Tenant's leasehold improvements are modifications made by the property owner or the leaseholder to render the space more usable for the tenant.
Tenant's leasehold improvements are a common practice in commercial real estate spaces where building owners want to attract and retain tenants. These improvements may also be provided as part of a new lease negotiation.
Tenant's leasehold improvements are applied to the interior space, such as the ceilings, walls, and floors. Modifications to the exterior and/or common area of a building are not considered tenant's leasehold improvements - they are considered Building Improvements. Building improvementsare not covered.
Does commercial general liability insurance have coverage for tenant rent default?
No. Commercial general liability insurance policies cover specific perils, such as, bodily injury, personal injury and property damage caused by the business operations, products, or injury that occurs on the business premises. These policies generally do not provide coverage for loss of rent caused by tenant default.
Are these transactions secure?
Yes. We don't store any electronic payment information. Once a payment has been made, verified, and processed, we then expunge the data from our system.
We go through an annual audit of our systems and processes to ensure we are doing everything possible to keep you and your insureds' information secure at all times.
What happens when an ACH transaction is being rejected?
In the case of electronic check transaction being rejected for NSF, submission error, or other bank related return reasons we notify the agent and the payer immediately by email, and at our discretion, resubmit the electronic check debit transaction within thirty (30) days. A return item charge, for the amount of $35, will be assessed for each transaction that payment is rejected or returned from the Payer's authorized financial institution.
How long will it take to receive payment for a claim?
Once you complete and submit the Initial Claim Form and provide us with all supported documentation, we will respond within one business day.
Your policy has a 30-day waiting period before the first payment is being processed. You will receive an email asking you to confirm that your tenant is still in default. Once verification has been received, your claim check will be sent out for the upcoming month.