Hello fellow investors,
I'm a beginner investor looking to purchase my first rental property. However, I read Brandon Turner's book "The book on rental property investing" and the section on lawsuits got me a bit nervous. While I'm working to find an insurance broker to help me find a bullet proof insurance policy when the time comes, I also wanted to get advise from other experienced investors about getting insurance as a landlord. Below are the questions I'm seeking answers to:
1) Are there certain types of cases that most policies don't cover but lawsuits related to them are fairly common?
2) Are there any circumstances in which tenants cannot sue the landlord?
3) Would it be advisable to include a clause in the renters agreement stating the landlord will not be liable in case of injury caused by tenant negligence?
Any suggestions on common pitfalls or books containing detailed information on insurance is also much appreciated.
Don't let fear of a lawsuit stop you. If you are in any business it's just a matter of time before you are sued. Most insurance policies don't cover flood insurance and its a common misconception that water damage is flood coverage and it is not. As a landlord you could get sued for dog bites and slip and falls, which are fairly common. Just make sure that your tenants have renters insurance and liability so it doesn't fall on you. Make sure you have great lease that addresses tenant liability also.
@Rishit Shah A good lease helps; but if someone wants to sue they will. Lawyers will want you to be named because 'landlords are rich'. One of the things I believe in is don't skimp on insurance. Check the company's feedback on the internet; key in something like 'xyz insurance sucks' etc. Don't buy from a company that won't honor claims; and won't defend policy holders. Get a generous umbrella liability policy that easily covers your assets.