Wrongful Eviction Insurance: Rental property owners, are you covered?

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Golden Gate Bridge

Wrongful Eviction Insurance: Are you Covered?

Litigation costs a lot. Even an owner, who is wrongly sued by a tenant but wins in court, can lose tens of thousands of dollars in the process, especially if there is inadequate insurance coverage. A fire policy, does not offer protection against lawsuits. A property owner should also have liability coverage.

There are many types of liability provisions. A basic liability policy covers claims for bodily injury & property damage. Although this might seem to be adequate, this type of policy may not cover claims for wrongful eviction or invasion of privacy. The courts have also interpreted this type of policy to exclude coverage for claims of emotional distress.

Basic liability coverage is inadequate for the protection of an owner or operator of multi-unit residential housing, or anyone contemplating an eviction. Wrongful eviction insurance, if not in the policy language, can be obtained by policy endorsement, or by a broader general liability policy.

Wrongful eviction coverage is usually found within the definition of “personal injury” in the policy. “Personal injury” is often defined as including “wrongful entry or eviction or other invasion of right to private occupancy.” Unfortunately, in an apparent attempt to avoid covering rent control claims, some carriers require that the claim arise from a covered “loss,” otherwise defined as “an accident.” We have seen letters from these carriers’ attorneys that claim wrongful eviction insurance does not cover a claim from service of an eviction notice because it is not “an accident.”  They may refuse to defend a property owner from any wrongful eviction suit based on an eviction notice or attempted negotiation.

There is no insurance coverage that will protect property owners from claims for punitive damages or breach of contract, nor is there coverage that will pay your eviction of a tenant. Read your policy carefully and recognize the limitations of the protection you receive.


CONTRIBUTED BY
Corrin S. Trowbridge, Trowbridge Insurance
650-FARMERS (327-6377) | ctrowbridge@farmersagent.com | www.trowbridgeins.com

 

Questions about our rental property investment market?  Please get in touch:

 

Cheryl Bower, Realtor CRS, GRI, ABR, ePro
Cell/Text: 415-999-3450

cheryl@cbower.com
DRE #: 01505551
Zephyr Real Estate

San Francisco San Mateo Bay Area listing agent & buyers agent

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About Cheryl Bower

Cheryl is a S.F. native & 17 year property investor/renovator, specializing in S.F. real estate including residential sales & leasing.

She represents sellers, first time buyers, move up buyers, investors, & landlords in San Francisco, San Mateo County & beyond.

Questions about our marketplace?

415-999-3450

cheryl@cbower.com

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