Why property managers require additional insurance…questions about insurance and landlording
Why would a property manager require additional insurance?
Well the big reason is to protect you the landlord client. There are many risks when managing and owning rental property. If you are sued for any reason we will most likely be sued. Yet when you agree to work with our company and most any other manager we are indemnified by our clients for these risks. The main problem is that if we are not named on your insurance policy the attorney your insurance policy appoints will only represent you and not us and we will have to incur a separate attorney to represent us. Those attorneys may then fight or might work together. Either way we end up no longer being in the same corner and our clients could find themselves in the positions of paying not just the insurance deductible but also our attorneys fees. Our clients don’t want that to happen nor do we.
Why do we have to have your insurance information as an owner?
Winters alone in Northeastern Ohio have been fairly difficult this year for landlords. Between ice dams, water backups and freezes in 2015, I’ve seen damages from just a few hundred dollars all the way to $30,000 PLUS! When an emergency arises property managers need to be able to contact the contractors covered, we need to know what is covered, and what can we actually pay for. You don’t want to call an owner in the middle of the night or an insurance agent for that matter asking a million questions. That would just delay the whole process and possibly cause more damages to the property. To be prepared for an emergency you need to have a copy of the owner’s insurance policy. Make this a requirement and add the copy to the property file.
Do you know what your policy covers?
Many homeowners don’t. I suggest calling your insurance company and asking what your coverage is. Somethings you want to try to purchase is the loss of rent coverage. It is a little more expensive to purchase but definitely worth it. If a tenant moves out a few months before their lease is up then your policy covers those months of rent that you would lose. You also want to make sure your policy covers water back up, for when the sewer gets backed up. We all know this is just something that happens.Another requirement we have added is tenant insurance.
Why do we require your tenants to purchase tenant insurance?
It is very affordable ranging from $9-$15 a month. We are able to ensure the landlord’s name is included on the policy. Require your tenants to purchase a policy through you. You will be able to ensure the landlord’s name is included on the policy. Requiring this will add double coverage to the home. As well as take care of a lot of issues when you have an insurance claim. For example, if your tenant has to stay in a hotel for a night due to a water leak Who doesn’t want that? Your home should also be covered if there is damage caused by tenant negligence. It will also help you take care of several issues when tenants do have a claim. Hotel stays, for example, are one of the coverages that many tenant insurance policies include. Many insurance companies will give a discount on your policy when you require tenants to purchase insurance. This is one way we help landlords when they need it most!
Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money!
Call us today at (440) 220-7300 to see how we can help you!