liability insurance for rental property - Posted by Brent

Posted by chi ming on September 09, 2010 at 15:03:57:

Most management companies require the “Additionally
Insured” endorsement because they are doing work on
your behalf and as owner, its your insurance that does
the covering. The insurance for your personal home may
cover additional homes but you will find that anything
specific to rental activity won’t be covered. I have a
multi property policy through Farmers that is actually
less than the lowest homeowner policy I could find.

liability insurance for rental property - Posted by Brent

Posted by Brent on September 03, 2010 at 15:02:05:

I have a single family rental home, and it’s insured through company A (don’t
know if posting company names is ok or not), and managed by a property
management company. The Mgt. co. is telling me I need 300K liability
insurance on the property and they need to be named co-insured. I called
company A and they said they will not do it without re-writing to a
commercial policy and it will be quite expensive. Company A advised me to
call the insurance co. that has my personal home and have them extend
liability to the rental property. They will not do it.

Anyone have this type problem and if so what is the best solution?

Thanks in advance,


Your own ins agent - Posted by John Merchant

Posted by John Merchant on September 06, 2010 at 11:58:24:

I’ve always found it most effective to have clients start by talking to their own P&C ins. agents so that agent knows of the other properties and thereby has all the insured’s props and situation in mind.

That P&C agent might find the best deal for you on your rentals with the same co as has your HO’s policy or some other co but it’ll likely be best price for you overall.

Insurance law in all states says that only persons who can legally collect on any ins policy must have a legal insurable interest; ins. cos. frequently defend claims against themselves by asserting “no insurable interest” defenses.

Just because a person or entity is named in a policy does not allow them to collect if they have no insurable interest in the property or legal “res”.

Lawyers frequently see “live-ins” named as beneficiaries in life, auto and home owner policies and it’s an everyday situation where some such is being ruled “not entitled” in his/her claim against some ins. co. because he/she had no legal relationship or insurable interest.

I’ve been involved in several cases where legal, though abandoned, wife hired me to collect on her estranged H’s life or auto policy although the deceased H had named such a “live-in” as his sole beneficiary. That woman, we knew, could not have been the H’s legal wife since my client had never been served with divorce papers. In fact in most of those cases no divorce filing was ever even found so H & original W, my client, was the ONLY legal beneficiary though she was unnamed in the policy.

That “live-in” would have his/her lawyer try valiantly to maintain his client as an entitled beneficiary but his efforts were invariably ruled futile since that person had no ins. interest, not being legal spouse.

Re: liability insurance for rental property - Posted by Brent

Posted by Brent on September 04, 2010 at 08:18:59:

Thanks for the help.
I’ve since found out the Mgmt. Co. offers this insurance also.

Re: liability insurance for rental property - Posted by Dave T

Posted by Dave T on September 03, 2010 at 17:38:35:

This seems to be fairly common practice. I have property in three states spread among six different property management companies and all the property managment companies had some requirement in their standard property management agreement to be named as an additional insured in my liability policy.

Some insurance companies will add your property management company as an additional insured, some won’t. If you are in a state where State Farm is writing policies, call them. State Farm has had no problem in the past naming my property management companies as additional insured for all my out of state properties.

For a couple of my in-state properties, the insurance company would only add my property management company as an additional mortgagee. I don’t think this is what the property management company wanted, but they never objected.

In a couple other instances, the insurance company refused to add the property manager as an additional insured so I went back to the property management company and told them that the insurance company won’t add them because they have no insurable interest in the property. The management company said OK, and the issue has never come up again.