Won't my tenants' renters insurance company just go after me/my insurance?
Example: Tenant experiences a loss due to some house issue. Let's say that a pipe bursts and destroys their laptop. Or they trip and fall because the snow wasn't cleared on time. They sue their renters insurance, which approves their claim and furnishes some money. But now the renters insurance sues me.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
2y
A pipe bursts and your insurance fixes your place. The laptop was not insured by you and (depending on local laws) without negligence on your part (ex. pipes were properly maintained by you, but one randomly burst), your insurance company is not going to pay to fix it. Your renter would be on the hook to fix it. That's where their renters insurance comes in.
You mention snow clearing. What does the lease say about who is responsible? If you are, you're getting sued. If the lease says the tenant is, tenant is getting sued. The renters insurance won't go after you/your insurance because the liability was on the tenant.
Now assume your tenants leave the tub running and cause $100K in water damage. Instead of filing a claim against your insurance and having it cancelled or your premiums raised, it goes against the renters insurance.
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
2y
It's like an umbrella insurance for both parties. If one of your tenants gets bit by a dog, falls off a ladder, etc. and they have a bunch of medical bills they can't afford, they almost have no choice but to sue whoever they can to get the money. The tenant's liability is a big part of it. If you require renters insurance coverage it's likely to cover most things. If they don't, the landlord is next in line to be sued.
If you require renters insurance the insurance companies can fight about who pays if something bad happens.
What's the difference between that and not requiring renters insurance? it sounds like in both cases, someone (the tenants / their insurance company) ends up suing me/my insurance company.
What's the difference between that and not requiring renters insurance? it sounds like in both cases, someone (the tenants / their insurance company) ends up suing me/my insurance company.
It's how those companies handle the damages that's different. They negotiate these claims based on who did what. It's another layer stopping them from suing you directly assuming you didn't do anything and maintained the property. Your rental property coverage is NOT going to cover tenants personal property.
Insurance is scam regardless of how you see you it. My friend has worked for Progressive Auto for 10+ years and even he says it's insane. If a tenant can't afford $15 per month what else can they afford?... it's not expensive.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
2y
A pipe bursts and your insurance fixes your place. The laptop was not insured by you and (depending on local laws) without negligence on your part (ex. pipes were properly maintained by you, but one randomly burst), your insurance company is not going to pay to fix it. Your renter would be on the hook to fix it. That's where their renters insurance comes in.
You mention snow clearing. What does the lease say about who is responsible? If you are, you're getting sued. If the lease says the tenant is, tenant is getting sued. The renters insurance won't go after you/your insurance because the liability was on the tenant.
Now assume your tenants leave the tub running and cause $100K in water damage. Instead of filing a claim against your insurance and having it cancelled or your premiums raised, it goes against the renters insurance.