Critique my landlord insurance policy please

8 Replies

I purchased a 2 bedroom condo in the DC area (U Street area) and am now using it as a rental. The condo is 1000 sqft. Should I get an extra umbrella policy up to 1 or 3 million? Please let me know if there is anything else I should add to be better covered. The following is what the new landlord insurance policy covers as of now:

Building Items:$94,000

Personal belongings:$3,000

Personal liability:$300,000

Medical payments:$5,000

Deductible(s)

All perils:$500

Annual Premium:$345.14

Originally posted by @Aubrey P. :

I purchased a 2 bedroom condo in the DC area (U Street area) and am now using it as a rental. The condo is 1000 sqft. Should I get an extra umbrella policy up to 1 or 3 million? Please let me know if there is anything else I should add to be better covered. The following is what the new landlord insurance policy covers as of now:

Building Items:$94,000

Personal belongings:$3,000

Personal liability:$300,000

Medical payments:$5,000

Deductible(s)

All perils:$500

Annual Premium:$345.14

 In your case, it would be prudent for you to require renter's insurance, as your tenant would come after you if something happens. Umbrella insurance won't help you there. Your insurance does not cover any of the tenant's property, tenant insurance does, and you could be sued for negligence. We had tenants suing us for negligence when their rental was broken into and burglarized.

I would add the umbrella and see if you can add loss of income/rental reimbursement.

Originally posted by @Frank Chin :
Originally posted by @Aubrey P.:

I purchased a 2 bedroom condo in the DC area (U Street area) and am now using it as a rental. The condo is 1000 sqft. Should I get an extra umbrella policy up to 1 or 3 million? Please let me know if there is anything else I should add to be better covered. The following is what the new landlord insurance policy covers as of now:

Building Items:$94,000

Personal belongings:$3,000

Personal liability:$300,000

Medical payments:$5,000

Deductible(s)

All perils:$500

Annual Premium:$345.14

 In your case, it would be prudent for you to require renter's insurance, as your tenant would come after you if something happens. Umbrella insurance won't help you there. Your insurance does not cover any of the tenant's property, tenant insurance does, and you could be sued for negligence. We had tenants suing us for negligence when their rental was broken into and burglarized.

Thanks, yes, our lease has a renters insurance requirement. I will look into the loss of rental income idea as well.

@Frank Chin Did your tenants win that case against you?

Umbrella insurance is so cheap...and covers your other assets and vehicles, that there is really no reason not to have it.

Also...U St corridor....great location to buy in.

Originally posted by @Nicole A. :

@Frank Chin Did your tenants win that case against you?

 The tenants threaten to sue, and I contacted a lawyer, who's also a family friend. He suggested I settle because it's a iffy case for landlord negligence. Tenant claims I have flimsy locks, and being a triplex with a common entrance, people don't always lock the front doors. We didn't require renters insurance then. We believe it's a scam because he claimed $1,500 in clothes stolen, among them a $1,000 mink coat, and he's not the type to wear mink coats.

Later on, had another tenant, and by then I required renters insurance. The tenant bought it, sent me the certificate of insurance, then cancelled it and got a refund. Some time later, he left his windows open, a heavy rainstorm came by, flooded his bedroom, and ruined his property. He tried to come after me, but this time, I stood firm, threaten to sue for eviction because he violated the lease, i.e. no renters insurance, and he backed down. Unfortunately the flood ruined my floorboards and I had them replaced. For this, I filed a claim against my landlord insurance. The repair work for the buckled floorboards cost a few thousand dollars.

My insurance agent warned me against filing too many minor claims as it will get my policy cancelled, and rates increased, and difficult to get another policy when cancelled. In this case, I would have filed a claim against the tenant's renter insurance, if he had it, for his negligence, i.e. leaving the windows open. 

@Charles Douglas @Aubrey P.  I think it may depend on how much equity your have in the entity that the rental is titled in. My understanding is there is a minimum cost to issue a policy. An excess liability may be 800 per year or an umbrella may be a few hundred a year and each property added would be a small adjustment. 

But if you are insuring only a 20K equity position you may not want the extra cost vs having a 100K equity position in which case the cost may not seem as high.  I can recommend Charles Douglas for insurance needs.

I would ask your agent about loss of rent coverage. Also at the bare minimum increase your liability to $500k. The cost will be a couple extra dollars. The umbrella is a great idea also for even further liability protection. As a side note, if this property is held in an LLC to make sure your agent is aware so coverage is being provided for your LLC.

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