Our job is to help minimize the risks of owning investment property in the Central Valley, including having all necessary protection from your homeowner insurance policy.
In addition to coverage, premiums, and deductibles, it’s also essential that your property manager be listed as an Additional Insured on your homeowner policy.
As the owner of the property, you are the “Named Insured,” and are the only one that receives the full benefit and all protections available in the policy. Because the property manager acts as your agent regarding the property, naming them as Additional Insured extends property liability coverage (only) to them as well.
Many people, even insurance agents, get confused and think that Additional Insured and Additional Interest are the same thing. They are not.
As we described earlier, naming us as “Additional Insured” extends property liability to us as well. “Additional Interest “doesn’t extend any coverage at all–it only means we’d get a copy of your insurance and be notified if you cancel or fail to renew your policy.
One of the many great things about a professional property manager is that we take care of all tenant communication for you. But if the tenant or their guest(s) get injured on the property, we’re virtually always included—alongside you, the owner—in any resulting lawsuit.
That’s why virtually every property management agreement includes a clause stating that the “Owner shall indemnify, defend, and hold harmless Property Manager” from any litigation from the tenant.
Listing the property manager as “Additional Insured” on your homeowner or landlord policy extends the liability and legal defense costs to include the property manager as well, in addition to you as the “Named Insured.”
Simply put, you want your insurance company to cover your property management company. Here’s why..
Let’s continue with the same example as before: suppose your tenant negligently lit several fireworks in the garage, causing the natural gas-powered water heater to catch fire; damaging the house, their property, and causing injury to them and/or their guests. Even if it was their own fault, they may choose to sue you—and us—for several hundred thousand dollars. Not pretty.
Imagine having an agreement requiring you to “indemnify, defend, and hold harmless” the property manager, but your property liability coverage protects you but not your property manager.
Without being named as the Additional Insured on the homeowner policy, the property manager could end up seeking reimbursement for all costs from the owner, either through their insurance or directly, for all related losses. It makes the process much more painful, takes more time to resolve, and is significantly more expensive for everyone involved.
Nobody wants that.
In theory, it should be as simple as contacting your insurance company or agent to make the request. In real life, it’s anything but simple. Sometimes they get confused, or imagine you’re confused, and incorrectly add us as Additional Insured instead (which is not the same at all , as mentioned above). Other times, they just won’t do it at all.
To make the process as efficient as possible for you, we’ve developed a specific form to provide to your insurer, making the formal request in writing. We’ve found this avoids confusion and misunderstanding. And you can always have them contact us directly.
1. Have your current insurance company add us
Download and complete this form and send it to your insurer. We’ve found it helps avoid confusion and misunderstanding. Hopefully they’ll add us. If so, great. If not, you can also..
2. Change to an insurance company who will add us
Obtain a quote from one or both of these online-based insurance companies that make it super-duper easy and simple. Seriously—it only takes like 3 minutes to get a quote. And they both make it easy to list us as Additional Insured.
If you’d rather keep your existing insurance company but they won’t add us as “Additional Insured” on your policy, we have one other available option for you..
3. We’ll handle it for you
Do nothing and let us take care of it for you! If after 30 days from onboarding (or notice) we haven’t received evidence of insurance naming us as Additional Insured, we will automatically add you to our Master General Liability insurance policy that provides $2 million of liability coverage with a $0 deductible for you and us, specific to your property, at a cost of $24/property/mo.
(NOTE: This policy adds liability coverage only and would be in addition to your existing policy. It does not replace it.)
Please keep in mind, the following information is at time of writing (mid 2023) and is subject to change over time.
At time of writing, the following insurance companies no longer offer new homeowner insurance policies in California at all (and some are cancelling even existing ones at time of renewal).
Based on our experience and knowledge, the following companies are willing to do it:
