The property management company for my apartment complex in NC has recently sent out a notice that all tenants will have to purchase a "minimum residential liability limit of 0,000" with the property management company listed as "interested party". This is not a requirement for renter’s insurance for the content of the apartment — i.e., the renter’s personal property. This is a requirement to force tenants to pay for insurance in the event of their own neglect of the property and any ensuing damage. For example, a tub overflows and damages the floors, or the stove is left on and burns down 1/2 the kitchen. I thought this type of insurance was covered under the insurance policy of the property owner, and that paying out for this kind of neglect is part of the risk you take when you are a landlord. (My father was a landlord, so I have no illusions about what tenants can or will do to a property.) When I asked if the landlord was doing this to reduce his insurance premiums and whether or not that cost reduction would be passed on to the tenants via rent, I got a lot of vague answers. I have never heard of tenants having to pay this kind of insurance to protect the landlord’s property, and I have rented in multiple states and countries. I understand the landlord wanting to protect himself against a tenant’s neglect, but I don’t understand why the tenants are supposed to pay for this insurance. I was told by the representative of the property management company that this is now common, although I have never heard of this before and, therefore, never paid for this before. I have only lived here for 3 years, and I am middle-aged, so I do have some renting experience and history. Forcing tenants to buy this insurance is a new one on me.
My questions are, is it legal to force tenants to buy renter’s insurance that covers the property owner’s items? If so, can the property owner set the minimum resident liability limit? Why am I, as a tenant, now supposed to buy insurance for a risk that has traditionally (I think) been covered by the property owner’s policy?
We’ve been told if we don’t buy the insurance then they will not renew our lease and we will have to move. That will cost me more than buying the insurance, and I’m not in a position, work-wise, to move, but I morally object to buying insurance to insure the landlord’s property, even if it is against my own possible, "neglect".
@acermill — good point. I had thought about that — the risk to myself — but I had only considered whether or not the property owner was covered in the event of tenant neglect. I had not considered that the insurance company would come after **me** to recoup their loses. Ah, naivete!
@Paul in San Diego :: they are requiring it of new lessees after September 1, 2009, or of current residents when they renew. That’s what I meant in the last paragraph when I said that I will have to move (when my lease is up), because this will be part of the terms of the new lease I would sign.
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