Renters Insurance

How Do Insurance Agents & Brokers Get Paid?

Posted on by Bob O'Brien

 

Insurance is a $1 trillion business in the U.S. The industry employs about 2.5 million Americans, according to the Insurance Information Institute. Life/health (L/H) insurers collect about $650B and property/casualty (P/C) insurers about $500B each year.

Noyes Hall & Allen specializes in property/casualty insurance. Before talking about how property/casualty agents are paid, let’s take a brief look at the P/C business.

Maine Property/Casualty Insurance Overview

P/C insurers provide auto, home and business insurance. There are 3 top distribution models for P/C insurance sales channels (1)insurance.

  1. Direct writers rely on advertising to generate the majority of their business.  When you call or respond to an advertising piece, you’re speaking with a company employee. They only offer products from one company. GEICO, USAA and esurance are direct writers. While they don’t pay agents to generate business, they spend a LOT of money on advertising. GEICO alone spends over $1B per year.
  2. Exclusive agents (sometimes called “captive agents”) also sell insurance only from one company. Unlike direct writers, they have local agents who sell and service their products. These companies also advertise a LOT to drive business to their retail agents. Allstate, State Farm and Liberty Mutual use the exclusive agent model.
  3. Independent agents (sometimes called IAs or Trusted Choice agents) are locally owned and operated. Each contracts with 5 to 15 insurers, thus offering their clients a choice of insurance companies. IAs can access an international network of brokers for unusual insurance needs. Insurers that contract with IAs advertise much less than other insurance companies. They are less likely to be household names. Many IA insurers specialize on one region or type of customer. Popular IA insurers in Maine include: Concord Group; Hanover Insurance; MMG Insurance and Vermont Mutual.
  4. Hybrid companies (ok, this makes 4 models, but not really). These insurers will write insurance using one or more different channels. These are usually large national insurers. Examples: Hartford; Liberty Mutual; Travelers; and Progressive.

How Maine P/C Insurance Agents Make Money

Both exclusive and IA insurance companies pay agents a percentage of the premium. Commission varies by policy type and whether the policy is new or renewal. Usually, commission is between 10 and 20 percent.

Exclusive agents often make a higher percentage commission on new business than renewals. Some exclusive companies even stop paying agents after several years. This incents the exclusive agent to focus on writing new policies.

Independent agents often make the same commission on both new and renewal policies. This allows the agent to provide  consistent customer service year after year. If you’re an existing client of an independent agent, you’re even more valuable than a new one. It takes an independent agent 3-5 years to recoup the cost of insuring a new customer.

Who Pays an Insurance Agent’s Commission?

The insurance company pays the agent’s commission out of the premium they collect. There is no specific surcharge on the premium that goes to the agent. Of course, the customer pays the agent’s commission – just not by a separate line item. Insurance premiums do not rise or fall with the agent’s commission percentage.

Can You Save on Insurance if  You “Cut Out the Middleman”?

No one sales channel is always the lowest cost. Claim costs and insurance company expenses all impact premiums. Some direct writers would have you believe that you save money by bypassing an agent. In reality, you might pay MORE without an agent to advocate for you. Of course, you could pay less, too.

Our Agents Speak English – And Insurance. If you don’t know the system, you can leave money on the table. We know to ask about certain discounts. Is your child on the honor roll or away at college without a car? Your local agent may know these things, or you might ask when you call in to do something else. If your agent is independent of the insurance company, they’re more likely to act on your behalf.

If you have a question about Maine home, auto, boat, motorcycle or business insurance, contact a Noyes Hall & Allen agent at 207-799-5541. We’re independent and committed to you.

How Much Insurance Savings Will a Home Security Alarm System Generate?

Posted on by admin

 

Maine’s property crime rate is a fraction of most states. We’re very fortunate to live in such a safe area. Even Portland, Maine’s largest city, has a property crime rate only slightly above the national average, and far below most U.S. cities. Sadly, crime still does happen in Maine. Many of our clients choose to protect their property by installing a burglar and fire alarm. Some include low temperature alarms, water flow alarms and other protective systems.

How Much Will an Alarm System Save on Home Insurance?

Let’s put it this way: you would never purchase an alarm system for the insurance discount. You purchase it for peace of mind and to protect your valuable property. But, if you’re going to install an alarm, you might as well get the home insurance discounts you deserve, right?

Which is the Best Alarm System for Insurance Discounts?

This list is ranked roughly from the smallest discount to the largest. Savings are based upon the average Maine homeowners insurance premium of $800 per year.

Smoke Detectors – $16

Working smoke and carbon monoxide detectors are the absolute minimum that every home, condo or apartment should have. Smoke alarms save lives. They also save money on home insurance – although very little. There is usually no discount for carbon monoxide detectors. The discount isn’t usually affected by whether your detectors are hard-wired or battery operated, nor how many there are in your home.

Local Burglar Alarm – $16

If you have a bell or siren on the outside of your home that’s connected to an intrusion detection system, most insurance companies will give you a small discount.

Freeze Alarm with Auto-Dialer – $24

This alarm alerts you when temperatures drop below a certain minimum. These are becoming more common with “smart home” systems, and “the internet of things”. There’s no human intervention or monitoring system; the effectiveness depends upon the person answering the phone call and actually doing something about the problem.

Central Station Fire Alarm – $40

This type of alarm is hard-wired and calls a service that’s monitored 24 X 7. If the alarm goes off, the service notifies the fire department. This is considered by most insurers to be a “top shelf” protection plan.

Freeze Alarm with Central Station – $40

This is like a hybrid between the auto-dialer freeze alarm and the central station fire alarm. In a low-temperature event, the monitored service is notified and contacts your heating contractor for emergency service.

Water Flow Alarm with Central Station or Auto-Shutoff – $40

Some of the most expensive winter claims are caused by water running for an extended time. Water damage is also a lot more common than theft or fire. Whether caused by a broken pipe, freeze-up, or a washing machine hose that lets go, water damage and cleanup can be extremely costly. If water stands for an extended time (like when you’re on vacation, or someplace warm in the winter), mold can develop. It’s no wonder that insurance companies reward people who install protective devices to minimize the chance of this type of damage.

Central Station Burglar Alarm – $40

This is like the central station fire alarm, except for burglary. If someone breaks into your home, the monitoring service contacts the police department. Note that the central station alarm credits are additive. If you have a burglary, fire, water flow and low-temperature central station system, your discount might be $160 per year.

Hard-Wired Emergency Generator – $40

Many Mainers purchased generators after Ice Storm ’98, when many towns were without electricity for days. Some insurers offer discounts for permanently installed hard-wired generators. These devices “kick on” automatically when power is interrupted, and require no human intervention. They power the most essential electrical services of a home, including the furnace or boiler, well pump and kitchen appliances. Obviously, maintaining heat during a winter storm can help avoid a costly freeze-up. Certain insurers reward that by providing a discount.

What’s the Best Insurance Company for My Maine Home?

The answer depends upon the unique features of your home: its location, construction, protective systems and more. It also depends upon your family. Do you have pets? A swimming pool? Are you near the coast? As an Independent Agent, Noyes Hall & Allen Insurance offers a choice of several preferred Maine homeowners, condo and renters insurance companies. We can help you find the best match. And, if your needs change, or the insurance company does, we can help you find another – without having to switch agents. Contact a Noyes Hall & Allen agent in South Portland at 207-799-5541, and find out why we say we’re “Independent and Committed to You”.

Moving or Relocating to Portland Maine – a 2022 Insider’s Guide

Posted on by admin

Small enough to navigate and make friends easily. Large enough to have plenty of live music, arts and sports. Hundreds of restaurants and almost 20 breweries, Portland Maine is one of America’s hottest little cities. It’s a regular on “best of” lists from publications as diverse as Men’s Journal, Elle Home Decor , Conde Nast Traveler and Time Money. But what’s it REALLY like to live in Maine’s largest city?

What’s it Like to Live in Portland Maine?

It’s easy to fall in love with Portland by walking its charming brick streets, eating fresh seafood, and drinking even fresher beer. You can find plenty of flattering and glowing reviews of Portland from locals and travelers alike. But what’s it like to really LIVE here?

Do I Need a Car in Portland Maine?

Unless you live and work on the downtown peninsula, and are able to Uber, bus or walk 1-2 miles with your groceries, you may not. Otherwise, you’ll probably need a car. Like most vibrant cities, parking spots can be scarce. Fortunately, the peninsula is compact and walkable.

The Metro bus  is Portland Maine’s public transportation.  If you’re from a bigger city, you’ll find that buses arrive less frequently than you’re used to. You can find Turo carshares in town. Uber and Lyft operate in Portland, and there are several taxi companies. Our airport (PWM) and Portland Transportation Center are less than 5 miles from the Old Port. The Amtrak Downeaster and Concord Trailways bus both loop to Boston several times daily. Concord also has a bus to New York City.

Cycling is a popular way to get around (the Portland Bike Party has more than 1000 followers). Maine has some of the most bike-friendly laws thanks to the efforts of the Bicycle Coalition of Maine. You can bike year-round here, although cyclists’ numbers dwindle during our long winters.

Related Post: Portland Maine: Green Living in a Small City

How Much Do Apartments Cost in Portland Maine?

Portland is cheaper than Boston or New York, but it’s definitely a landlord’s market. Like many popular cities, Portland has had  a very low vacancy rate and a shortage of good apartments. Even though 1000 new rental and condo units have been built or planned, it’s tough to find a good deal.

The Portland Press Herald produced a very cool series of interactive maps of Portland Maine in 2015, showing rents, demographics and lifestyle features of Portland neighborhoods. The rents are outdated, but the neighborhood descriptions and heat maps are still relevant.

Whether you rent an apartment, condo or a cottage, we recommend that you buy Maine renters insurance to protect your property from damage and theft, and you from liability.

Related: How Much Does Renters Insurance Cost in Portland, Maine?

Can I Afford a Home in Portland Maine?

Portland’s home and condo market is strong. This reflects the desirability of the area and availability of jobs in Portland. The area has a wide range of housing stock, from old to new, townhouses to ranches, contemporaries to lofts. The median sale price in the Portland market is more than $300 per square foot according to realtor.com.

Where Do I Park My Car in Portland?

As in most vibrant cities, parking is a premium commodity in Portland Maine. If your apartment doesn’t offer off-street parking,  get a free residential parking sticker for the area in which you live. This exempts you from 1-or-2-hour time zones on streets near your home. The stickers DON’T exempt you from parking meters, no parking zones, overnight parking, loading zones, etc.

The most hassle-free way to get to local businesses & restaurants is on foot or bike. If you must drive, the city of Portland Maine operates parking meters and pay and display parking stations . Hot tip: Portland Maine metered street parking is free after 6pm and on Sundays.

Portland has several public and private parking garages ($2.00 – $4.00 per hour). There are also private pay-and-display lots, which are NOT operated by the city. These have been controversial, as they will boot your vehicle if you leave your vehicle too long.

Parking Bans in Portland Maine

Portland Maine Parking Ticket
source: maine.gov

During winter storms, the city of Portland Maine parking bans to allow public works crews to clear the streets and remove snow. During a Red Parking Ban, no one can park on city streets. This means you! Don’t ignore the ban; your vehicle WILL be towed, and it’s an expensive hassle to retrieve it.  Here’s a list of where to park during a snow ban.

How Soon Do I Need to Register My Car After Moving to Maine?

You should re-register your car in Maine and get a Maine driver’s license within 30 days after moving here.  Here’s are the 3 steps to register your vehicle in Maine after you move here:

Related: How & When to Register a Car in Maine

Settling In

It’s easy to find arts, sports and cultural events in Portland Maine. Another great way to meet new people is to get out and enjoy the outdoors, learn more about our area, or to volunteer. Here are links to some of our favorites:

We hope you find this information useful as you think about moving to Portland Maine. Greater Portland has been our home for more than 80 years. We love it here. If we can help with insurance in your new city, please contact a friendly local Noyes Hall & Allen agent at 207-799-5541.

What is Hazard Insurance? Maine Home Insurance Explained

Posted on by Bob O'Brien

 

Whether you’re buying a home in Falmouth, a condo in Portland or income property in Scarborough, if you’re borrowing money, your lender will ask for proof of “hazard insurance”.

What is Hazard Insurance?

Hazard insurance is just the bank’s term for property insurance. The bank wants to make sure that if a disaster strikes, they will be protected at least up to the amount of your loan. Typical types of hazard insurance in Maine include:

  • Homeowners insurance (sometimes called an HO-3 or HO-5);
  • Condominium Unit Owners Insurance (aka HO-6);
  • Renters insurance (HO-4);
  • Dwelling Fire policy (often used for rental property or camps).

How Much Hazard Insurance Do I Need on My Home?

The bank would prefer to have 100% of your loan protected by property insurance. Sometimes, that’s too much insurance. After all, your insurance will only pay to rebuild your home. Insurance doesn’t cover items such as land, site work, landscaping or other items that are included in the purchase price. Your Maine homeowners insurance agent should help you

  • estimate the cost to rebuild your home;
  • provide cost estimates based upon the coverage you need;
  • provide proof of insurance that will satisfy the bank.

A good insurance agent can help you avoid buying too much – or too little – insurance.

If you have questions about Maine investment property insurance, or protecting your home, camp or condo, contact a Noyes Hall & Allen agent at 207.799.5541 today. We offer a choice of many of  Maine’s preferred property insurance companies, so we can do your shopping for you. As we like to say: “we’re independent and committed to you.”

 

Does Homeowners Insurance in Maine Pay to Remove a Fallen Tree?

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If a tree falls in your yard, and no one hears it, is it covered by your insurance? What about the cost to remove a fallen tree? The answer, as it is with all insurance questions, is “it depends”. Policy forms vary.

This post assumes that you have an “HO-3” Maine homeowners insurance policy using forms from the Insurance Services Office (ISO). This is the most common type of homeowners policy in Maine.

 

Did a Tree Hit Your Home or Other Structure?   tree damage

If so, you probably have coverage for:

  • The cost to remove the tree
  • The damage to your home, fence or other structure

But, not coverage of the cost to replace the tree itself.

Is a Fallen Tree Blocking Your Driveway?

Depending on the edition of your home insurance policy in Maine, you may have coverage for at least some of the cost to remove a tree that’s blocking your driveway. Even if it didn’t damage any of your property, the 2000 edition of the HO-3 policy provides $1000 of coverage ($500 max per tree). Older forms have no coverage unless the tree hits a covered structure.

 

Did a Tree Fall on Your Car?

If so, your auto policy, not your homeowners policy, might pay to fix your car. Hopefully, you have Maine auto insurance, and chose to buy “other than collision” (widely known as “comprehensive”) coverage. The cost to remove the tree is not covered by either home or auto insurance, unless the tree blocks your driveway (see above).

If There’s No Damage, There May Be No Coverage

If a tree falls without damaging any insured structures or blocking the driveway, you will likely need to pay the costs to remove it. Some insurance policies provide a limited amount of coverage for these cases. Check with your agent or insurance company to see if yours does.

Did Your Tree Hit Your Neighbor’s Property?

If so, the damage would be covered under THEIR homeowners policy, not yours. If the tree fell due to obvious neglect, your liability insurance might apply. For a more detailed explanation, see our prior post “Is Your Fallen Tree Covered by Maine Homeowners Insurance?”

Tips to File an Insurance Claim for a Fallen Tree

  • Take photos, preferably from different angles to show the damage.
  • If utility wires are involved, stay away! Call your electric utility to have the wires cleared.
  • Call your insurance agent or company to report the claim.

If you live in Greater Portland Maine, contact a Noyes Hall & Allen Insurance agent for answers to your Maine renters insurance, homeowners insurance and condo insurance questions. 207-799-5541. We’re independent and committed to you.

Does Maine Homeowners Insurance Cover Stuff Away from Home?

Posted on by admin

 

Clients often ask if their homeowners insurance covers their belongings when they’re away from home. Here are 3 recent email inquiries with common scenarios:

  • I have removed some furniture and other items that were at my condo and am storing them at a warehouse.  Is my stuff is covered under my condo insurance, or do I need to insure the stuff through the company that is storing the items?
  • I’ve rented a self-storage unit for some of items that I don’t have room for in the garage. Are these items covered while they’re in storage?
  • I’ll be renting a condo in Florida for the month of March. Are my belongings covered when I’m away from home?

This infographic spells out the coverage found in most Maine homeowners insurance policies. Your coverage may differ, so check with your Maine insurance agency.

Off Premises Homeowners Coverage

In general, your belongings are covered to 100% of your Personal Property (Coverage C) limit on your Maine condominium, renters or homeowners policy. It doesn’t matter where they’re located, anywhere in the world.

The only exception is if they’re at a residence of yours other than the one listed on your policy. Then, it’s only covered to 10% of your Personal Property limit, or $10,000, whichever is LESS. Presumably, the personal property at that residence would be covered by another homeowners, renters or condo policy.

Keep in mind that certain types of property, such as jewelry and silver, have limited coverage on most policies. Talk to your agent about insuring jewelry on a homeowners policy.

If you need insurance in Greater Portland Maine, contact Noyes Hall & Allen Insurance in South Portland at 207-799-5541.We’re independent and committed to you.

Does Your Home Insurance Cover Short Term Rental?

Posted on by Bob O'Brien

From Portland to Cape Elizabeth, Pine Point to Sebago Lake, peer-to-peer rental services are very popular in Maine. Recent articles in the Portland Phoenix and Portland Press Herald suggest that the practice is increasing. Does renting your Portland Maine area home, apartment or condo via a short term rental service like AirBNB, HomeAway or VRBO affect your insurance? You bet!

rentme

You’ll Have Almost No Coverage for Your Stuff – Ever!

If you regularly rent your home or part of it, most Maine homeowners insurance policies limit coverage for your personal property (stuff) to $2,500 per unit. If your place burns down, or is damaged by a storm, you’ll have very little insurance coverage to replace  your belongings, furnishings, appliances, clothing, sporting goods or tools.

Even worse news: your home doesn’t have to be rented at the time. It only has to be “regularly rented or held for rental”. Does listing your home on a website with a calendar of availability make it “regularly held for rental”? The insurance company might say so.

You May Have No Liability Protection Either

Do you rent your entire home more than “occasionally”? If so, you have no liability coverage on your homeowners policy. What’s occasionally, you ask? The policy doesn’t define that. Nervous yet?

Do you rent part of your home or condo to someone who brings more than 2 others? Homeowners insurance policies exclude liability coverage completely. If your tenant or their guest gets hurt, who do you think they’ll expect to pay their medical bills, lost wages and pain & suffering? Even if you aren’t at fault, you might have to hire a lawyer to defend you.

Does the Peer-to-Peer Network Protect You?

We haven’t seen any insurance agreement that covers you where your homeowners, renters or condo policy does not. We have seen one that completely replaces a homeowners policy with a commercial insurance policy, at a higher cost. If you rely on protection from the peer-to-peer site, we recommend that you read their insurance contract very, very carefully.

Can Your Insurance Company Cancel Your Homeowners Policy if You Rent Your Property?

Many insurance companies believe that their ordinary homeowner’s insurance rates are insufficient to pay losses resulting from renting your home. They may ask you to stop renting or to make changes in your home. If you fail to comply, they may cancel your policy. That may tempt you to not tell your insurer about your rental income, and hope for the best. That’s taking a big risk.

We recommend that you talk to your Portland area insurance agent before you rent your home. They can discuss options for properly insuring you against catastrophic loss. It may cost a bit more, but at least you’ll know you have coverage.

For more information about Portland Maine homeowners, condo or renters insurance, contact Noyes Hall & Allen at 207-799-5541.

Party Time! Does Maine Homeowners Insurance Cover Renting a Hall?

Posted on by Bob O'Brien

 

It’s party season in Maine. Many of our clients will host a Bar Mitzvah, wedding, baby shower, reception, anniversary party, memorial service, graduation party, or fund raiser. They’ll rent a church hall, function hall, camp, country club, college or city building. And, they’ll call us for insurance advice.

The Good News: You’re Covered!

If you bought  homeowners, condo or renters insurance from Noyes Hall & Allen, your policy says:

6. “Insured location” means:
h. Any part of a premises occasionally rented to
an “insured” for other than “business” use.

Those terms in quotations are defined in your insurance policy. If your policy has your name on it, you’re an “insured”. If you’re not profiting from the function, it’s not a “business”.

Boom! Your Noyes Hall & Allen homeowners policy covers your liability from the function and the hall rental.

The Function Hall Should NOT Want to Be an Additional Insured

Every venue should have a rental contract. Most  contain “hold harmless” clauses. That means you agree to be responsible for what happens while you’re renting the premises. Scary? Maybe, but unless you want to have everyone at your house, you don’t have much choice.

Some venues ask to be an “additional insured” on your homeowners insurance policy. Additional insureds are common on Maine business insurance policies. That makes sense, since businesses operate various activities in many locations. It’s not the same on a personal policy.

That Word

The Additional Insured form on a homeowners insurance policy (HO 04 41) is different. It limits “insured” status to others to your home. In other words, it’s useless in a case where you’re renting a function room. No homeowners insurer that we are aware of allows “additional insured” status for cases like this.

Also, remember the “business” exclusion on the homeowners policy? That applies to all “insureds”. So your homeowners policy excludes the owner of the function hall from coverage as an insured anyway.

A function hall shouldn’t ask you to list them as an “additional insured”. Tell them we said so.

Let’s Keep it Simple

Your Maine homeowners insurance is a broad and powerful tool. It protects and defends you against injury and damage you’re liable for. That includes liability you assume by a contract.

You signed a rental contract for the hall. You agreed to hold the owners harmless for what happens during your function. If someone sues the owners for an accident at your function, they will turn that lawsuit over to the responsible one: you. And, your homeowners insurance will protect and defend you.

This is all INCLUDED in the homeowners, renters or condominium insurance policy you already have. You should only need to prove to the hall that you have insurance. Call us, and we can do that for you.

What About Liquor Liability?

Homeowners policies cover you for what happens on the premises. They exclude liability from auto accidents. Look to an auto insurance policy first for that coverage. The driver’s auto insurance would protect you AND them. If the driver doesn’t have enough insurance, your own Maine auto insurance should also protect and defend you. The coverage and damages can vary greatly depending upon individual circumstances. Talk to your Maine insurance agent for individual advice.

Pro Tip: Hire a professional bartender. They’re trained to recognize when someone has reached their limit. Ask them for a certificate of liability insurance. Mingle with your guests and enjoy your party, instead of stressing out!

Do I Need Wedding Insurance?

Wedding insurance is a different product. It covers the additional costs created if your venue closes, your photographer or band cancels, or some other calamity happens. That’s different that the liability issue we’ve been discussing.

If you live in the Portland Maine area and have questions about renting a hall, wedding insurance, or other insurance questions, contact a Noyes Hall & Allen Insurance agent at 207-799-5541. Noyes Hall & Allen represents many of Maine’s preferred insurance companies, and offers choice and professional advice. We’re independent and committed to you.

Insuring a Maine Condo Rented to Others

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Do you need to insure a condominium in Maine that you rent out as income property? Insuring condos can be complicated. Your condo association has a master insurance policy. You have a unit owners insurance policy. Your tenant should have renters insurance. Which policy pays if your unit suffers water damage, fire, or other covered loss?

What’s Insured by the Condo Association Master Policy?

The master policy will cover building portions as prescribed by the bylaws that govern the association. Some associations insure the entire building complex (known as “all in” in insurance jargon). Others require a unit owner to insure the interior of their unit, everything inside the studs. Still others only require the unit owner to insure improvements and betterments made to the condo after it was built. Check your association bylaws and insurance policy to see which applies to you.

What’s Insured by Your Unit Owners Policy?

Your policy will cover items not covered by the association’s master policy. This might include improvements to the unit or the association deductible. Condo bylaws can vary greatly. It’s important to consult a Maine insurance agent who knows how to insure condominiums. They should understand your bylaws and your association’s insurance policy to help you buy proper coverage.

Many insurers issue condominium unit owners policies for rented condos. Others may use a Dwelling Fire insurance form, with customizing endorsements. As long as they are tailored to your situation, either should provide acceptable coverage.

Make sure that the owner of your condo unit is listed on your policy. If you set up a trust, LLC or other entity, if they’re not listed, they’re not covered. This is especially important in case of a liability claim involving your condo unit.

What’s Insured by Your Tenant’s Renters Insurance?

Your tenant’s renters insurance policy covers their “stuff”, such as furniture, clothing, and computers. Your policy will NOT pay for this damage. Neither will the association policy. Save yourself from conflict; require your tenants to buy renter’s insurance.

Questions About Condominium Insurance?

Insuring a Maine condominium can be complicated. Noyes Hall & Allen Insurance serves dozens of Southern Maine condominium associations from two-unit conversions to 100+ unit complexes. If you have questions about condo insurance, contact a Noyes Hall & Allen Insurance agent at 207-799-5541

Related Posts

Should a Portland Maine Landlord Require Renters Insurance?

Renting Your Home? Get Landord Insurance.

Attention Renters: $0.50 a Day Makes All the Difference

Should a Portland, Maine Landlord Require Renters Insurance?

Posted on by Bob O'Brien

 

Many Portland, Maine landlords make their tenants purchase renters insurance when leasing an apartment or condo. This is a smart idea for both parties, for many reasons.

Why Should a Landlord Require Renters Insurance?

Protects the Landlord’s Assets

Renters insurance (HO-4 in insurance jargon) is the best way to protect a property owner’s assets from the risks of their tenants’ activities. It protects the landlord in 2 important ways:

  • Insulates the landlord from tenants’ liability. If your tenant leaves something on the stairway that causes someone to fall and get hurt, it’s the tenant’s fault. A tenant without insurance makes you an easier target for a lawsuit, because you have more assets (and insurance). Renters insurance insulates you because it pays your tenant’s legal defense costs and damages.
  • Covers Tenants’ Belongings. Many renters ask “does my landlord’s insurance cover my stuff?” They’re shocked to learn that it does not. They think that if there’s a fire, theft or leaky pipe, their landlord’s insurance will pay to replace their stuff. It won’t. Smart property owners make tenants buy renters insurance to avoid these disputes and disappointments.

It’s Another Way to Screen Tenants

Most responsible Portland Maine landlords run credit checks on prospective tenants, and check their references. This protects them and other building tenants from the harm and nuisance of undesirable renters. Requiring renters insurance is another way to screen out bad tenants.

If a prospective tenant balks at buying insurance to protect their own assets, how will they treat YOUR property? If they say they can’t afford $10-15 per month for insurance, perhaps they’re not going to pay their rent on time, either.

Should a Landlord be an Additional Insured on a Tenant’s Renters Policy?

NO!

Some Maine landlords or property managers ask tenants to add them as an Additional Insured on their renters insurance policy. They believe that it provides more insurance to them and notifies them if the tenant cancels their insurance. Don’t do it!

Why an apartment or condo landlord should NOT be an Additional Insured on their tenant’s policy.

  1. Most insurance companies won’t do it. Listing landlords  as “additional insured” is common on commercial insurance policies. But personal insurance companies frown upon it. Commercial insurers also readily provide a “certificate of liability insurance” to landlords. Personal insurance underwriters usually refuse.
    Personal insurance companies use the Additional Insured endorsement when the “named insured”  and another party are related (e.g. co-owners). An insurer defends and pays for an  Additional Insured’s liability  from “ownership, maintenance or use of the residence premises”.  They would accept this scope of responsibility for co-owners of a property, but not landlords.
  2. It’s unnecessary if you have a lease. Tenants policies extend liability coverage for duties a tenant assumes via contract before the occurrence. If the lease contains a “hold harmless” clause in which the tenant waives rights of subrogation against the landlord, the tenant’s policy will pay, and the tenant’s insurer will not attempt recovery from the landlord.
  3. There’s a better way to notify you if your tenant’s policy cancels. It’s called Additional INTEREST Endorsement. This meets the needs of landlords, and maintains the integrity of  landlord/tenant responsibilities.

Recap

Portland Maine landlords, property managers, and property owners who rent apartments or condominiums to others should require tenants to purchase renters insurance, and ask to be named as an additional interest (NOT additional insured).

If you rent a home, apartment or condo to others, or own other residential rental property, and have questions about Portland, Maine business property insurance, contact a Noyes Hall & Allen Insurance agent at 207-799-5541. If you need renters insurance, contact us for a Portland Maine renters insurance quote.