Landlords and Tenants

[GRCinCA]

This week at our rental housing association meeting the subject of renters insurance came up. It seems that many of the property owners and managers understand how a tenant's renters insurance policy can add a layer of protection for the owner of the unit - yet there are many problems enforcing the requirement to purchase and maintain the renters insurance. For example, those property managers and owners who do require the renters insurance run into problems chasing town renters who let the policy lapse - it creates a lot more work!

One of the owners poised the question: can we simply purchase a renters insurance policy on behalf of the tenant and adjust rent accordingly?

This initially seemed to be an easy and logical solution. However, after really looking at this closely I tend to think it is a bad idea.

So my question to the forum is: what solutions do you see your property owners and managers implementing which help address the issue of renters letting their renters insurance policy lapse?

I think obviously the owners/property managers can be named as additional insured - which would create a scenario where they are notified of cancellation. But are there other solutions?

[d's insurance store]

The landlords (especially in a regulated state like California with funny rent laws) first need to see if it's legal to enforce via the lease a mandatory requirement for tenant's insurance.

If that's approved from a legal standpoint, then you're into the problem of enforcement. Some personal lines companies will allow a landlord to be in an additional insured position and other's won't because of the extension of liability. And a reading of an HO4 generally yields very little in the way of primary liability coverage for the tenant to the benefit of the landlord. Fire legal is limited...damage to the rented premises is limited...water damage unless endorsed for a waterbed is limited...so what's left...Personal liability for trip & fall and dog bites?

I've had my landlord clients refer their tenants to me for renter's coverage, and generally the lower value tenant who sees no need feels resentful, buys a very low limit, high deductible policy and cancels after the down payment. So, I'll do it once as a courtesy to my client, but don't spend much time on keeping the tenant.

Probably the only viable option is to demand a dec page or bill at six month or one year intervals, or pursue evection for lease violation if the tenant goes without...and really, in the current rental/economic environment, especially in Sonoma County, how many landlord's want that?

[jiana]

For me, the best way to avoid later problems when it comes in this matters is to address issues in a lease. Make deal with both parties.and if necessary have the self discipline who are involve in this matter .Pay and provide the proper benefits and most especially when it comes of rights and obligations.