Is Additional Insured on Renter's Insurance Necessary?

[Dave Bopp]

A current tenant acquired a renter's insurance policy that listed him and his girlfriend on the policy as the insured individuals. He asked the insurance company to have the landlord added as an additional insured and the insurance company told him he could only have two names on the policy. 

How important is the additional insured on the policy? Should I require the tenant to terminate the policy that he's paid for to find another company that will allow them to list their landlord as an additional insured?

Thank you! 

[Frank Chin]

I was the landlord and I was not listed as an additional insured. Let me tell you what happened.

I got a new tenant, signed a lease which required him to obtain renters insurance. He's not happy with it, but I told him it protects him and me. So he bought it, gave me a certificate of insurance. 

Several months later, he went out, left the windows open, a heavy rainstorm came by, his bedroom was flooded, all my floorboards ruined, along with damages to his belongings. He wanted to file a claim against my insurance. I told him, you were careless, file a claim against your renter's insurance. He told me he cancelled it the same week he showed me the certificate of insurance.

I called my insurance broker and was advised that I would have been notified had I been included as an additional insured. Now there's been some discussions on this board and some insurers now add in something for additionally notified, but not all do that. So check to see how the insurance notifies the landlord of changes in insurance status for those that is designated as additional insured. If not, you'll  be stuck if you have a wise guy tenant like mine.

BTW, the tenant in my case threatened to sue me, I threaten to evict him, and the claim for damages came to several thousand dollars to my property in addition to damages to the tenants belongings which my landlords policy does not cover, unless for landlord negligence.  Without renter's insurance, tenants always claim landlord negligence if something happens. With it, it's up to the insurance company, so tenants don't have to make up stories for things they lost. One tenant who was burglarized claimed landlord negligence which at the time I did not require renter's insurance.

My insurance broker drilled this into me, tenant's mostly are under the impression landlords carry insurance and it covers them but it does not. Not long ago, there was a apartment building fire here, over 30 families left homeless, left with nothing, and most thought they're covered by landlord insurance. Most were shocked it doesn't.