To renew my apartment lease, the management is making me to take out a 100K property liability insurance policy that covers water, fire, smoke, or explosion damage to their building. Is this legal? This policy is not to be confused with renters insurance which would cover my property.
That is absolutely crazy for an apartment, while it is normal that a commercial tenant to be required to have liability insurance not really for damage to the property but for personal liability for accidents resulting in personal injury and property damage to customers and visitors.
It sure is. You are renting and living on his property and he as every legal right to protect that property.
Insuring the building is the landlord owner’s responsibility – not tenants’. Tenants don’t control repair/maintenance of the building, after all. Tell landlord, ‘Nice try.’ Landlord should be careful to ensure tenants are provided with all relevant rules from insurer to ensure full coverage, however. If tenant is somehow negligent, landlord (via insurer) will sue. In that case, tenant’s insurance should cover it. If you’re not sure it would, find a new tenant insurance provider that will.
You are not giving us the complete story. You said this is a renewal of a lease so apparently you were allowed to lease the first time without the Insurance requirement which is normal. What has changed since the initial lease? What kind of unusual exposure do you now present. I don’t think you will be able to get a policy for fire, theft, water damage etc on the building since you do not own it. You can get a personal liability policy which would cover damage to property belonging to others caused by your negligence.
A renter’s insurance policy contains two major components, liability coverage and coverage of your personal belongings. Most people are aware that renter’s insurance covers one’s personal belongings, but many people seem to be unaware that renter’s insurance includes liability coverage. It is legal for an apartment complex to require renter’s to carry liability coverage. I lived in an apartment complex that began requiring us to carry renter’s insurance with liability coverage of at least $25,000. I was able to purchase a policy from the same company that I get my Auto Insurance. My insurance company’s standard liability limit is $100,000. You may want to verify with your insurance agent that the policy will cover what they are specifying. The premium is very inexpensive, and this is something every renter should have.
It is absolutely legal and makes perfect sense, for both you and the landlords. Many tenants are not aware that, should they accidentally start a fire in their unit, they can be and WILL be held responsible for the costs of the resulting damage. Yes, the landlord carries insurance for such situations, so that he can quickly repair the damage and get the unit rented. However, if the fire investigation reveals that the fire was the fault of the tenant, the landlord’s insurer will pay for the damage and will then in turn sue the tenant to recover what it has paid out. Do you REALLY want to be responsible for $20,000 worth of smoke/fire damage without coverage ? Most renter’s policies cover anywhere from $25-$50K of such liability coverage as part of the standard policy. Your landlord wants $100K worth of coverage, so you only need to ask what extra will be the cost for raising that liability limit to $100K.
If the landlord can provide proof of such insurance from each tenant to HIS insurer, HIS premiums will be lower.