Landlord's Liability Insurance Explained

Landlord's liability insurance is an insurance policy that helps the landlord cover the expenses that result from lawsuits brought on by their tenants. If the tenant is injured on the property and can prove that the injury resulted from the landlord's negligence, he or she has a right to sue for damages. If the landlord has liability insurance, the insurance company will help the landlord to pay those damages.

Liability insurance can be either a separate insurance policy or one of the components of a more comprehensive landlord insurance policy. This document will focus on the former, though many aspects of it do apply to the latter.

Landlord Liability and Tenants' Ability to Sue

As stated above, the tenants have a right to sue their landlord for damages if they can prove that they were injured because of landlord's negligence. However, a tenants inability to prove it doesn't mean they won't sue. Rather, it means that the landlord will have prove that the damage wasn't due to his negligence, to get the lawsuit thrown out. That is why the landlords need to understand the circumstances under which they could be held liable. Those circumstances include:

  • Question of responsibility - the tenant must shown that the landlord was responsible for maintaining the portion of the rental property that caused the accident.
  • Failure to maintain - the tenant must show that the landlord didn't take reasonable steps to fix the problem, and that fixing the problem wouldn't have been unreasonably expensive or difficult.
  • Likelihood of injury - the tenant must show that the landlord's failure to fix the problem was likely to cause an accident. He or she must also show that the problem was likely to cause the accident that caused the injury.
  • Proof of injury - the tenant must show that the landlord's failure to fix the problem actually caused the injury and that said injury was genuine.

If the tenant can prove the landlord's liability, he or she has the right to sue the landlord for the cost of medical bills, the value of earnings lost as the result of the injury and emotional distress. Depending on the type and severity of the injury, the tenant may be able to sue for compensation for any lasting physical suffering and permanent physical disability and/or disfigurement.

What Landlord Liability Insurance Will Cover

If the tenant sues, the landlord liability insurance will cover landlord's legal fees. If the tenant wins the lawsuit, the insurance will help to cover the cost of paying the damages. However, it may not cover the entire cost. That's because all landlord liability insurance policies come with caps that limit how much money the policy will pay out. The landlord can avoid this problem by buying a more expensive landlord liability insurance policy. However, a more expensive policy tends to come with bigger rates and fees, which can increase the financial burden that liability insurance is supposed to alleviate.

Landlords can avoid paying too much for their landlord liability insurance by taking out an insurance with caps that are equal to the value of their property. They can also save money by buying one of the more general landlord insurance coverage. While it may not offer as much money, it covers a greater range of emergencies, which provides a better value for the landlord.

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