Reality check - adding landlord as "additional insured"?

June 10, 2017 5:56 PM

The landlord of the home we were interested in renting is requiring us to add her as additional insured (not additional interest) to our renters insurance policy. I have never been asked to do this. I'm seeing online that this happens sometimes, but also reading that it's a very bad idea. Help clear this up for me? Is it a deal-breaker for us?
posted by moira to Work & Money (21 answers total)

Yes. She's not entitled to any of that money should anything happen, that covers your belongings.
posted by fshgrl at 6:00 PM on June 10, 2017 [5 favorites]

That's not correct. If the landlord experiences no loss (e.g., there's a water leak that destroys your property), making the landlord an additional insured doesn't entitle her to a cut of the money. However, assuming this, like many renter's insurances, includes a liability component, if you should take a sledgehammer to the stairs of the building and someone else falls through, having the landlord as an additional insured means she is covered if she is sued for negligence.

The ingenuity of landlords for shenanigans is infinite, so I'm not saying there's no way to abuse it, but the fact is that you are taking on effective control of the condition of a property for which she is still potentially liable if a person is injured on it. That's what the additional insured provision is for. I don't think it's unreasonable and I have signed such leases in the past.
posted by praemunire at 6:06 PM on June 10, 2017 [2 favorites]

I've seen this specified in several leases I've had in NYC, including from landlords who I knew and trusted 100%. It's not universal, but it's definitely not uncommon.
posted by Itaxpica at 6:14 PM on June 10, 2017 [4 favorites]

Even if it's legit, the landlord is still trying to move some of their cost of doing business on to you. I'd think they should have their own policy, covered out of the (slightly higher) rental rate. But this way they can advertise a lower rental rate while making you pay some of their costs of being a landlord. So at the very least, take the increased cost of your "your" contents policy into account as a de-facto rent bump.
posted by russm at 7:59 PM on June 10, 2017 [7 favorites]

And also consider the potential increased cost to you of getting insurance in the future if there's a claim against *your* policy for events outside of your control. Say, instead of you taking a sledgehammer to the stairs like praemunire's example, the landlord skimps on repairs creating an unsafe situation. Somebody (you?) is injured and sues the landlord. The landlord claims on *your* policy. You move somewhere else and when trying to get renters insurance they see the claim on your previous policy, so your premium goes up.

In short this seems shady as hell to me, but unfortunately the kind of "shady as hell" that's largely unavoidable as a renter.
posted by russm at 8:08 PM on June 10, 2017 [5 favorites]

I don't know if it's a deal breaker for you but I think it might be for me. I've rented in several states across the USA and I've never heard of this, despite participating in some markets where things tend to be rigged strongly in favor of land lords.

What's your second choice look like? This sounds like a question where your region or metro area may be important for determining how normal it is for land lords to get away with demanding such a weird obligation in their favor that doesn't help you at all and may in fact harm you e.g. as outlined above.
posted by SaltySalticid at 8:25 PM on June 10, 2017 [1 favorite]

If you have liability insurance on a property and an additional insured, the insurance is for liability caused by you/your agents/those under your control, not from the independent negligence or misconduct of the additional insured. At least whenever I've seen it; probably you can negotiate it in some other form.

Renter's insurance costs peanuts unless you have a history of arson; additional insureds on such a policy, micro-peanuts. In the scheme of requested landlord concessions, this is nothing. If someone dies on your rented property, whether you pay $25 or $20 a month on your next rental insurance policy is going to be the last of your worries.
posted by praemunire at 8:35 PM on June 10, 2017 [3 favorites]

I stand on principle, sometimes to my own peril. I would not agree to this. I would tell the landlord to get their own policy. Having said that, if you like the rental, are willing to accept the cost of the insurance and are not concerned with the insurance relationship with your landlord, I think it is reasonable to go for it.
posted by AugustWest at 8:38 PM on June 10, 2017

Response by poster: My concern isn't the cost of the policy. I'm worried about liability issues (e.g. per this website). My brain is mush these days, so I'm wondering if there's something I'm missing that makes this not a big deal.

We're good tenants to have, and there are other options to look at, but timing-wise it puts us in a not great place right now to have the lease fall through.
posted by moira at 8:46 PM on June 10, 2017

I've lived in the same apartment building for 19 years; this was the first year my lease had a mention of this. I called my insurance agent to inquire and take care of it, and she said that the vast majority of renters for which she handles policies have had to ask her to add this in the last two years. My agent says it's not a problem for me, adds no cost to my already tiny renter's policy, and takes nothing out of my pocket in any event at all. FWIW.
posted by The Wrong Kind of Cheese at 9:14 PM on June 10, 2017 [1 favorite]

My brain is mush these days, so I'm wondering if there's something I'm missing that makes this not a big deal.

No, you're not crazy. Landlords need to carry their own insurance, this is a bothersome and stupid trend.
posted by fshgrl at 10:23 PM on June 10, 2017 [1 favorite]

This is standard for commercial leases. I deal with making sure our clients (and our company as third party managers) are listed as additional insureds all time. I assume this is trickling down to the residential market.
posted by vespabelle at 11:21 PM on June 10, 2017

This does not make any sense. Your renters insurance rate is connected to the idea that you don't own the place. They are just insuring your stuff, not the building. You're being asked to buy your landlord some home insurance, on the cheap, and fraudulently, to boot. Don't do this.
posted by kerf at 11:40 PM on June 10, 2017 [1 favorite]

Vespabelle: This is standard for commercial leases.

I also have this experience with some commercial property we rent; car lenders also ask for this on car insurance too. But, I haven't seen this for renter's insurance; it strikes me odd since renter's insurance is about personal property and your liability as a renter, not insuring the property itself. Your landlord may think this is a way out of insuring their own property properly? Best to consult a lawyer or your local renter advocacy organization.
posted by AzraelBrown at 5:13 AM on June 11, 2017

Whatever this is, it is absolutely not a case of your landlord trying to save money by passing costs along to you. That's not how insurance works. Your landlord already has insurance; it's called a dwelling fire policy, and it covers damage to the structure of the building only. Your renter's insurance covers, to overgeneralize, everything else. I'm not an insurance agent, but to me, this makes perfect sense. There are non-structural items in this apartment belonging to your landlord. To wit: a refrigerator, a stove, maybe some ceiling fans, etc. If the apartment burns down, regardless of whose fault it is, the landlord is going to want to be reimbursed for those items, aren't they?

Anyway, this is exactly why working with an actual insurance agent is preferable to buying insurance online. The whole reason they continue to exist is because they provide almost immediate and correct answers to your questions.
posted by kevinbelt at 7:08 AM on June 11, 2017 [2 favorites]

Best answer: There's a lot of uninformed speculation in this thread. For more info, I'd call your insurance company and ask their advice.
posted by slidell at 9:03 AM on June 11, 2017 [4 favorites]

Best answer: We also just dealt with a landlord that wanted this (ended up not signing the lease because of this and various reasons). Our rental insurance company (Travelers), when contacted, outright refused to add the landlord as an additional insured, which gave us a good bargaining position, and was also a sure sign that adding your landlord as an additional insured is kinda shady.
posted by dis_integration at 10:49 AM on June 11, 2017 [1 favorite]

Best answer: I'm not an insurance agent, but to me, this makes perfect sense.

Read the ink on liability, those are all the reasons my insurance agent told me to NEVER agree to this. It's shady as fuck.
posted by fshgrl at 11:26 AM on June 11, 2017 [1 favorite]

The practical effect of insurance policies, even those with identical wording, vary greatly by jurisdiction.

For example, just because a person is a well- informed insurance broker or insurance attorney in say, New York, does not mean that anything they say is at all correct about a policy issued in, say, California.

One must consult an expert in the law of the applicable jurisdiction to determine what this means in your context.
posted by PlannedSpontaneity at 12:41 PM on June 11, 2017

Best answer: I did insurance defense for 4 years as a lawyer. This is bullshit. A landlord will-or should-have a "CGL" policy, a commercial general liability policy. It will cover the building, anything attached to the building (i.e. fans, lights, fixtures, major appliances etc), negligence of the landlord. It will not cover your stuff. That's what renters insurance is for - your stuff. The landlord does not need to be a named insured on your renter's policy because he does not own any of your stuff. The only other named insureds should be your girl/boy friend who also owns stuff in the apartment. There are differences around the edges state by state but not very much. This is bullshit for a residential landlord-tenant situation.
posted by kerf at 8:53 PM on June 11, 2017

Response by poster: I really appreciate all of your answers. We decided it was a deal-breaker for us, regardless of whether our insurance company was going to allow it.

I checked in with our agent this morning and was told they will not do this.
posted by moira at 2:23 PM on June 12, 2017