"Landlord Liability Coverage: Get the Most You Can Afford"
Landlord liability coverage protects you from lawsuits – frivolous and otherwise. Please don't be cheap on this one. Yes, you'll definitely want to price shop, but make sure you get the most coverage you can afford. If you underinsure yourself, and the worst-case scenario happens, you could literally be ruined.
THE NECESSITY OF LIABILITY INSURANCE
We live in a truly litigious society, which makes having adequate landlord liability insurance critical. My mom always used to say, "anyone can sue anyone for anything." And she was, and continues to be, 100% correct.
Did a tenant slip on your icy sidewalk? Prepare to get sued.
Did a tenant get bit by the neighbor's dog? Prepare to get sued.
Did a tenant slip on a wet bathroom floor? Prepare to get sued.
Did a tenant stub his toe on the stove? Prepare to get sued.
I could go on and on but you get the point. As a landlord
renting a property,
your risk of getting sued goes up exponentially. Part of this is understandable – people will be living in a property you own, and household accidents are not uncommon.
But part of this also falls on the shady side – you are more likely to be a target than a "non-landlord" because you could be misperceived as being wealthy simply by virtue of the fact that you own
The bottom line: don't allow yourself to be used by your tenants like an ATM. Get the most liability coverage you can afford.
TIPS & TIDBITS
- I recommend at least $500K of liability coverage per property / policy. Get more if you can.
- Target a deductible of $1,000-$2,000, depending on the cost impact.
for additional protection.
- View your liability insurance as only one piece of your
broader risk management strategy.
- Make sure that the owner reflected on the property's title matches the name of the insured on your policy.
- Run this blueprint, as well as any other ideas you may have, by your insurance agent for a "sanity check."
some things will increase the cost of your liability coverage
(pets in apartments, fireplace, trampoline, etc.). Keep this in mind when
So, there you have it. Landlord liability insurance can and will protect you from getting burned. Shop around, get the best liability coverage for your budget, and do not take this decision lightly. You don't need any additional, unnecessary risk in your life, so please proceed carefully.
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