Insurance is an important part of keeping your investment property and your financial interests protected. At SJA Property Management, we are leaders in the property management industry, serving the Puget Sound area including Redmond, Bellevue, Kirkland, Seattle, and the surrounding cities. Today, we want to talk about your insurance requirements.
Landlord versus Homeowner’s Insurance Policy
First, we want to remind you about the type of insurance policy you need. It’s important that you make sure you have a landlord policy in place, not a homeowner’s policy. A homeowner’s policy is only good for you when you’re occupying the property you own. A landlord policy covers you against different risks, and if you’re renting out your home, you definitely need that type of policy in place to ensure you’re adequately covered.
Insurance Requirements for SJA Property Management Clients
There are two specific requirements that SJA Property Management has for all the properties we manage.
- You need a policy with $1 million in liability coverage. You need that coverage in case anything goes wrong at your investment property. You’ll be covered for catastrophic things like fires. This is not an unusual amount for a landlord’s liability coverage, and we want to make sure you’re protected.
- You need to name SJA Property Management as an additional insured on your policy. Most property management companies have this requirement, so it should come as no surprise. We need to be named on the insurance policy itself as an additional insured or a co-insured.
Additional Insured: Why It’s Important
We don’t accept being named as an additional interest. It’s critical that your policy includes our company as an additional insured or a co-insured party. This is easy to do, and most insurance companies will do it at no additional cost. There are a few insurance companies that don’t have the ability to include this, and we’d ask you to look for another insurance provider if that’s the case so you can get proper coverage.
As an additional insured, we can request a new policy for you when it expires. This allows us to follow your insurance and ensure you remain insured at the proper levels. This requirement helps us to protect you and your property. For example, if there’s bad wiring in the wall and something goes wrong, the tenant will sue the property owner and also the management company. Even if we didn’t know anything about the wiring, we’ll be named in the lawsuit. So, we want your insurance to cover us as well.
We have our own corporate insurance that covers us up to $2 million per incident. But, remember that we have 500 properties, and things happen more regularly to us than they will to an owner who only has one or two properties to cover.
Please go over these insurance requirements and contact us at SJA Property Management if you have any questions. We’d be happy to talk more about our insurance requirements and how these things help us manage your property more effectively.