Is Landlord Liability Insurance a Must Buy or a Waste of Money?

Legal fees and tenant lawsuits can be crippling to any landlord. Learn if landlord liability insurance is right for you and how you can protect yourself from any financially painful lawsuits. No matter how capable you are as a landlord, some nasty things are just plain possible to avoid if you are unlucky. One of them includes having your tenant sue you because they were injured due to any defects on your rental property.

When will Your Tenant be Able to Sue You for Their Injuries?

If you picked up the phone one day to hear your tenant screaming for blood and threatening to haul you to court, there are no need to panic yet. Just because he was hurt while living on your rental property doesn't that you are responsible for his injuries in the eyes of the law.

To begin with, you will have to be aware of the property defect that caused the injury. If you carry out your property inspections regularly and your tenant did not inform you of any property damages in advance, you will not be responsible.

Secondly you have to be responsible for the faulty part of the property that resulted in your tenant's injury. If your tenant was burnt while preparing lunch on his own defective gas stove, then it's no fault of yours. As the owner of the gas stove, it's his duty to make sure that it's in good working condition.

Your tenant also has to handle your furniture and appliances in the way they are intended to be used. For example let's say your tenant stood on your tiny coffee table to replace a light bulb. If the coffee table collapsed and he fractured his wrists, you will definitely not held responsible. In fact, he will have to pay you for another coffee table in this case.

However if you were sloppy in maintaining your property and your negligence caused your tenant to be hurt, you can sued especially if you were informed of the property damage well in advance and that damage is an obvious safety hazard.

How You will Benefit from Buying Landlord Liability Insurance?

If your tenant takes you to court, your landlord liability insurance will pay for any legal and courts that you rake up.

In case your tenant does win the lawsuit, your insurance company will be the one forking out money to pay his claims for medical bills, physical disability and loss in earnings during recovery. If his belongings were wrecked - For example your garage roof crashes onto his car, he will also be able to claim money from your insurance company to fix it.

For a greater peace of mind, choose a liability insurance that gives you wider safety net. It's a good idea to pick a policy which also includes protection against lawsuits due to illegal evictions, unfair treatment, slander or violation of tenant rights.

I will recommend every rental property to buy landlord liability insurance unless you are a skilled landlord who maintains your rental property flawlessly. If you have an understanding tenant and your property is in tip top shape, then perhaps you can also choose to skip on this type of insurance to cut costs.

Otherwise the financial blow that a tenant lawsuit can deal you is not something that most landlords can afford to bear.

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