Click on the television and you will likely be greeted with insurance ads. Geico has the most marketing muscle, but you’ll also be graced with the presence of Stephanie Courtney, better known by her TV persona Flo, from Progressive insurance ads.
This author’s personal favorite is “Mr. Mayhem,” the face of Allstate – Dean Winters – who always gets a bad break. Whether experiencing an explosion when he ignites a grill, staying in a creepy roadside motel because he ran out of gas, being forced to change a tire in a downpour and other vexing events, catastrophe is always looming for Mr. Mayhem, who has superhuman resilience in not only surviving these calamitous events, but offering cool commentary.
As a sidebar, the lawyers in us note there is some sentiment the term “mayhem” is misplaced because it has a specific legal definition of the criminal act of maliciously disabling or disfiguring another person. Nonetheless, rental property owners should anticipate unique risks not necessarily covered by insurance, and unless they take a hard look at their policies, they can share this character’s fate.
Writing a home, auto policy and the like comes with its own complications but is fairly perfunctory. Some insurance policies that are not always so always top of mind. In a two-part series, we touch on them.
Wrongful eviction coverage
Many studious landlords that do right by their tenants cannot fathom being sued, but assuredly, it happens at an alarming rate. Our hard-won experience has shown us that in 99% of the cases, the litigation is not initiated because of any shocking abuse that makes the headlines, but by mundane disputes or a naivety of rent control laws that can quickly balloon out of control. In this video, Daniel Bornstein explains the importance of going through your insurance policy with a fine tooth comb to ensure there is a rider for wrongful evictions.
If the displaced tenant feels aggrieved, they can allege all manner of claims we outlined here and especially so when aided by a firecracker tenant attorney.
San Francisco rental property owners who file an unlawful detainer action, in particular, should be put on notice that they will be greeted by opposing counsel since the City has guaranteed legal representation to all evictees. Our main takeaway in a previous article was that the so-called “No Eviction Without Representation Act” will be a field day for tenant right attorneys who will erect barriers to the unlawful detainer with various gambits that are beyond the sophistication of the resident had he or she fended for themselves.
What’s at stake
“Rent differential damages” are painful enough, but enter punitive or treble damages, and rental housing providers are well-advised to pay for wrongful eviction coverage.
A standard liability insurance policy insulates a property owner from lawsuits and liability from bodily injury and property damage, but typically exclude ‘personal injury’ coverage that protects against intangible or economic harm to a claimant that does not arise from bodily harm. Being sued for wrongfully evicting a tenant, then, falls into this category.
One of the largest economic consequences, of course, is attorneys fees to defend a wrongful eviction lawsuit, irrespective of the merits of the litigation and of course, in San Francisco, there was no concerted effort to provide free legal counsel in order to protect good landlords from bad tenants.
Coverage for short-term rentals
There is no shortage of horror stories among hosts who came home to find tens of thousands of dollars worth of damages or learn that a guest has been injured. Airbnb’s Host Protection Insurance is a great perk, but the coverage is far from comprehensive. If property owners are engaging in short-term rental agreements, it’s vital to keep a finger on where your protection begins and ends.
Insurance companies have been slow to adapt to the modern day iteration of the temporary flop and its unique risks, but as carrier appetite remains low for these hospitality arrangments, some emerging programs are filling the void. When in doubt, please contact our office for a check up on your policy to cauterize risk.