[Sunny88]

hi there,

I have two questions regarding insurance for a rental property I am purchasing.
I have asked a property management company to manage this rental property closed in a few days. The rental company asked me to put this company as additional interest in all liability insurance for the house. I wonder whether this is a customary practice. Also, when I asked the insurance company to add this rental management company as additional interest for liability, the insurance agent add the management company under the "First Mortgagee" position ( the house is purchased via cash. No mortgage is involved). Is that the right position for such interest? Thanks for your insight.

[Willy702]

First mortgagee...no. However a lot of these are just forms the agents have and they are not easy to change. The proper way to show it is as an additional interest. It shouldn't make any difference to your rate or your coverage, but it would make it clear to your insurance company its a rental and some will reclassify or even deny you coverage if it is a rental property.

[KonaKat]

yes it is very common. we also require it. You tell your insurance company that the property is a rental, and add the PM as "additionally insured". Does not cost that much per year. I have never known this to have any bearing on a mortgage although I suppose it could if you had some type of special financing for buyers where one is required to living in the house and not rent it out for a period of years.

[Hemlock140]

The property manager will not accept liability for anything that happens on your property, should the tenant or someone else sue you both. Naming them as additional insured is a standard practice.

[Sunny88]

Thanks for the all.
I will check with the insurance agent and find out where I can indicate the manage company as additional interest in the application form. The house was purchased by cash and no any special financing was involved.