Any landlord that owns property and leases or rents it out to tenants should have liability insurance on the property to protect the landlord against damage to the property or any persons in addition to tenants getting injured on the property.A general liability policy normally includes damage from fire, smoke, airline and automobile impact, explosions, malicious damage caused by tenants, theft and vandalism, lightening and hail. This policy is referred to as a building insurance policy for landlords. The policy only protects what the landlord owns not the tenant’s belongings. To protect the renters property, the tenant will need to get renters insurance.
Other recommended insurance policies that landlords should carry on their building are as follows:
- Property and Casualty Insurance (covers against loss from fire, storm or other catastrophic losses)
- Flood Insurance (designed for rental properties located in communities participating in the National Flood Insurance Program)
- Umbrella Insurance (offers liability insurance coverage beyond the General Liability Insurance policy limits)
Your premiums will be higher with tenants that have pets, children, and who are self-employed and work at home or who are unemployed. You should also get coverage for business interruption which protects you from tenants that default on the rent or persons who get injured in the building such as tenant’s guests or repair people. Without proper coverage, you could go bankrupt if someone is seriously injured and sues you. Shop around and get at least three quotes. You may want to check with your mortgage company to see if they can get you any discounts.
Insurance coverage for landlord’s negligence can be obtained by the landlord requesting the insurance company to add an endorsement in the exceptional case where a waiver of subrogation cannot be obtained, but that coverage will add significant expense to your insurance premium.
Violation of Health or Safety Laws
Some communities have adopted housing codes or other specific requirements which may affect the condition or equipment requirements of residential rental property. These include the requirement that smoke detectors be installed in housing or that residents comply with recycling ordinances. Be sure to check with your local unit of government to see if you are affected.
Failure to comply could result in criminal and civil penalties and fines.
The tenant may give notice to the landlord in writing of the violations and mail it to the person or place where rent is paid. If after timely receipt of the notice, the landlord fails to remedy the situation within 30 days, the tenant may deposit all the rent that is due with the clerk of the court having jurisdiction or file a court action against the landlord to remedy the condition and/or reduce the rent or terminate the rental agreement. In jurisdictions that have rent control, the tenant can file a complaint with the rent control board or rent stabilization board.
Failure to Make Repairs or Keep the Rental Habitable
You should check your local city ordinances regarding the laws and your rights to clean and habitable housing. The tenant should request in writing that the landlord make the repairs or cure the defects. If the landlord does not, then the tenant can do the following:
- File a complaint with the local housing authority, rent board or health and safety inspector.
- Place the full rent in escrow with the court, and ask the court to order the landlord to make repairs.
- Withhold rental payment or make the repairs and deduct them from the monthly rent.
- Sue the landlord.
- Use the landlord's failure to make necessary repairs as a defense to either the landlord's Unlawful Detainer or eviction.
- Terminate the lease.
Recklessness and Intentional Harm
Any party committing recklessness and intentional harm is in violation of the law. The lease can be terminated for such behavior. Also civil and criminal charges could be filed.
Renters insurance protects tenant’s personal belongs in case of a natural disaster or if a third party is injured on the premises. Some landlords require tenants to maintain renters insurance so check your lease. It is a good idea to have insurance since the landlord’s insurance will not cover your personal belongings and liability for personal injuries of third parties that occur on the premises. Renters insurance covers situations where your apartment is uninhabitable due to a reason covered under your policy, and your insurance will cover you for additional living and moving expense until you can move back in or find a new place to live. Premiums depend on where you live, your deductible, the insurance company and any additional coverage. If you buy a burglar alarm, smoke alarms and fire extinguishers, or you purchase more than one type of insurance from the broker, your premiums may be lower. Also, having higher deductibles lowers premiums.
Liability and Rental Insurance
Tenants are liable for injuries sustained by any third parties such as guests while visiting their premises. Renters insurance will protect the tenant and the landlord against lawsuits resulting from injuries of third party guests of tenants. Tenants that cause damage to landlord’s buildings are liable. If the damage was accidental, your renter’s insurance policy will cover the situation.
- The content of this guide is provided for informational purposes only. If you need help with a rental or real estate question, please click here for a Free Case Review from a local real estate lawyer.
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