To add property manager in your insurance or not?

4 Replies

I have seen mixed responses here. My PM has his own company. Shall I add his company as an additional insured or not? What are the pros or cons to me as an investor? thanks,

@Vibhu Arya I have only ever had one PM company try to make me do this. It ended up that the company dropped us the day before closing because our insurance agent didn't understand what they wanted to do and couldn't get it done quickly enough. I would imagine a well run PM business would have their own policy and wouldn't need your to add them. 

Smarter rental management
Outperform your peers by 71%
NestEgg landlords save $6,960/yr in fees & 20 hrs/mo*. Self-manage for free or go hands-off for $29.
Start now, get $500

@John Warren your PM apparently didn't know how to communicate the need...or maybe they didn't understand it.

Yes, the PM has their own insurance policy. They are not leaching off your policy, changing your coverage, costing you more money, or any of that. Being added to your policy only gives them coverage under your liability and only for claims filed against your property. If your house burns down, the PM doesn't see a dime of it.

If someone sues the Landlord, they will sue the PM at the same time. If the PM is on your liability policy, they will be defended by your carrier. If not, they will have to file a claim with their own insurer and there's an increased likelihood that the PM insurer and the Landlord insurer will start pointing fingers at each other.

It's increasingly common and I've only dealt with one insurance company that refused to do it. Allstate, USAA, State Farm, Farmers, and many others have never had a problem with this and can explain the benefit to you.

Thank you everyone for your help. My insurance agent say its not needed and the property manager hasn't asked for it yet. So guess I'm good for now!