Posted by Anne_ND on July 10, 2003 at 19:25:28:
As my insurance agent’s letterhead says: “you don’t have to be a millionaire to be sued like one”.
If someone’s kid gets bitten in the face by your tenant’s bichon frisee, sure, they’ll sue the dog owner, but they’re also going to sue the rich landlord on whose property it took place (landlord’s are always rich).
You can be completely innocent, but if you’re sued by a parent whose kid is hideously deformed, you will have to pay an attorney to defend you. Let’s say you’re found innocent. You still could have legal bills, and from the point of view of your insurance company, you make bad choices in tenants. They will drop you like a hot potato, not just the house where the incident occurred, but all of your other houses and your home too.
The thing about insurance policies is that you don’t want to have to use them. The other thing is that you don’t want your policies to be connected in any way. Because you don’t want a plaintiff’s attorney to be able to find your other properties (I’m assuming your properties are not in your name).
Yes, it’s more expensive to insure houses in different entities. It’s more expensive to have a liability policy on each house that is independent and a separate liability policy for the company that manages the houses, and then a personal unbrella policy on top of that. From my point of view it’s just a cost of doing business, and the extra money from renting to pet owners pays to cover those costs.
All of this is ameliorated by the fact that your dog-owning tenant has a dog-bite policy that covers you as well (‘also insured’), that way your own insurance need not be involved.