Should I add a property manager as an additional insured?

I am the owner of a rental property, and my property manager sent an email stating it is now required that they be added to my landlord policy as "additional insured." Is this typical, and will it be beneficial to me?

Thank you for reaching out to The Zebra! This is a great question, and with people owning vacation homes or short-term rentals, it comes up fairly frequently these days. It's common for a property management company to want to be listed as an additional interest on your insurance policy. Most insurance companies will want you to inform them that you have a property management company for your rental, as well, so you might have already mentioned it when you signed up for your original policy.

A possible benefit is that some insurance companies provide a discount on your insurance for having a property management company in the first place. A solid property manager helps add peace of mind for your insurer that someone with a vested interest is keeping an eye on things and helping maintain the property. Not all insurers will provide a discount for this, but some will and it's worth asking.

One key point is the difference between an additional insured and an additional interest on a policy. They aren't the same, and it's good to fully understand the difference before you change anything on your policy.

• An additional interest is someone who has a financial interest in the property but doesn't own any part of it and can't make a claim to the insurance company. The property management company has a financial interest in your rental because they are collecting a management fee for their services; if something happens to your home, they have one less home/client and therefore less profit.
• An additional insured is someone who can make claims and would get the benefit of the policy if a claim happens. This would be a person who owns part/all of the entity being insured. For example, vacation homes are sometimes owned by multiple parties (such as large family properties) and so the individuals should be listed as additional insured in case any of them need to make a claim.

A landlord policy is an important component of owning rental properties because a homeowner policy is only meant for your primary home (not a rental). It's also important to remind (or possibly require) tenants to carry renters insurance to protect their personal belongings, since your landlord coverage won't. If you're using a home as a short-term rental (think Airbnb or VRBO), there are other details to consider. Feel free to reach out to our knowledgeable agents if you want to shop for home insurance options or compare rates for landlord policies. Give us a call at 888-255-4364 to get started.