Fear of getting sued for renting out property.

4 Replies

I would like to continue renting out my house but I heard that if anyone is injured on your property, you are liable. Is there insurance to cover against this?

It seems like anything can happen on your property. Is anyone else scared of being sued for injuries that occur on your property? How can you protect your assets?

Isn't your house insured? Your homeowner's insurance (required if you have a mortgage, good idea even if you're free and clear) has GENERAL LIABILITY as one of it's key ingredients. That's your insurance for anyone getting injured.

Look, there's about 70 MILLION housing units in the US, lots of people coming onto the property all the time, repairmen, delivery drivers, contractors, post office etc.

In addition to your homeowners liability you may want to carry an UMBRELLA POLICY for at least ONE MILLION. This is particularly true if your net worth exceeds the policy limits of your homeowner's. IIRC we pay about $200/year for one million coverage.

all cash

An agent told me that you have to buy a policy that covers renters otherwise the insurance will not cover you. Is this true? If I change the policy, the mortgage company will know. Could the mortgage company call the loan because it is no longer a primary residence?

When you moved out and the house became a rental you should have changed your policy from a "homeowner's" policy to a "Fire and Extended Coverage" (Fire and EC in insurance lingo).

If YOUR insurance agent didn't do this for you when you moved HE IS DERELICT IN HIS DUTIES. And let's face it, he knew once your property address and mailing address were no longer the same!

The Fire and EC policy should be a bit cheaper than your homeowner's policy was since it doesn't insure any CONTENTS. I'm sure the mortgage company can't call the loan just because it's no longer a primary residence, but check your loan documents just to be sure. If it's a "conforming" loan I know they can't.

all cash

FYI - Most legit property management companies won't work with you either if you do not have the proper insurance coverage.

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