I’m looking for opinions on the necessity of tenant discrimination insurance.
I recently discovered that our “liability” insurance does not cover the liability of tenant discrimination. It seems like every time I turn around there’s another loophole that insurance does not cover…
We have policies in place–and bend over backwards to follow them–so that we avoid discriminating, but in a country where anyone can sue anybody for anything they like, this is worrying. After slip and fall lawsuits this seems like one of the most likely things that could end somebody in court.
The quote we got to provide this insurance for a small 50 pad part is $1,800 per year. That’s almost as much as we are paying for the full liability policy.
What do you think? Do you pay extra for this insurance? Any idea what one of these potential lawsuits could cost in legal fees and fines if it came about?
Any other common loopholes we should think about plugging in our insurance?
Attorneys that spoke at our investor group made suggestions. You need to have a written criteria for occupancy in your units. That can include length of employment, length at each job, length at last home, income level related to debt service (like mortgage companies do), no evictions, no felonies (although i read that california now deems that as discrimination). I would only rent to felons if it was more than a dozen years old. I look at discretionary income. I would not rent to someone that had an old beat up car if it was their only transportation and their budget was tight, obviously because a non-running car could mean no way to get to work. Its all relative. You may want to put together criteria and have your eviction attorney look at it. It really comes down to doing you homework, background checks, reference checks and keeping good records of your screening, and notification of tenant.
Thanks @brakes172 . Yes we have a written screening criteria that’s been reviewed by our attorney. Hopefully this reduces the likelihood of a discrimination lawsuit and increases our chances of successfully defending a suit. I’m sure the attorney fees would be expensive even if we “win” though.
Anyone could still sue us for anything, and it makes me nervous to know that there are seemingly random things our liability insurance doesn’t cover.
I pay extra for this insurance for myself as an individual as well as a separate policy from the park Try New York Marine and General Insurance Company. They should be able to address any concerns you may have.
If you want to know how the government thinks or will react just look at HUD guidelines. They have a favorite saying at HUD. “What you do for one, you do for all.” If you keep that in mind when enforcing House Rules and Regulations etc., you will keep yourself out of a lot of problems. That includes, background checks, occupancy, denials, evictions, etc.