Pros and cons of adding PM to your insurance

[Joe S.]

So we have a number of properties that are managed by primarily to PM companies. Both of the companies adjusted their agreement where we did not have to add them to the insurance. We have one particular company that we are looking to add for a property that is slightly outside of the areas that the other to handle. As normal, they are trying to say we have to add them to the insurance. My wife is adamant that they will not be added to the point that we may not do business together with this new company.

What are the pros and cons?

[Nathan Gesner]

Quote from @Joe S.:

Joe, this actually demonstrates that you're not working with true professionals. If the PM requires you to add them to the policy but can't explain why, that makes me question their competency. And if they require it, but then change that requirement the minute you complain, that further demonstrates they don't understand their own policy.

There are two options: additional interest and additional insured.

Additional interest means the named party will receive notification of changes to the policy but they won't receive any benefit. Once you add the PM, the insurance provider will send proof of coverage to the PM. If your policy changes or is canceled, the PM will be notified. If you miss a payment, the PM will be notified. This is a great way for the PM to keep tabs on your insurance and help ensure you remain protected.

Additional insured means the PM will be covered under your liability policy only. If the house burns down, the PM doesn't get anything. This is only to protect them in case of a liability issue like a slip-and-fall case. When someone sues you, they are likely going to sue the PM as well. Your policy will protect the PM at the same time as they protect you. This is smart because if you file an insurance claim and the PM files one through their own insurance, there's a good chance the attorneys from each company could turn on each other and the PM will be fighting against you. Keeping the claim under one policy ensures one fight against the suing party.

There's plenty of information about this online. Here's just one example: https://tsquareproperties.net/...