Eviction Rise Leads to Increased Risk for Landlords
According to CNN Money, millions of people across the U.S. will be evicted from their homes this year. The cost of rent has risen over 7 percent in the past few years, while incomes have only increased about 2 percent.
As a result, many people struggle to afford their housing payments. With the steady rise in rent, property owners are more at risk than ever for a wrongful eviction claim. For that reason, personal injury coverage is essential for an insured acting as a landlord in any capacity and is available on many USLI policies, such as Comprehensive Personal Liability, Condo/Dwelling Fire and Personal Umbrella.
FindLaw.com defines a “self-help” eviction as a landlord retaking possession of a property without following the city or state eviction procedures. Almost every state prohibits a landlord from using self-help to evict a tenant, even if the tenant has not paid rent, destroyed property or violated a term in the rental or lease agreement. The truth is that many landlords are not aware of the laws regarding evictions, and they decide to take matters into their own hands. Also, Legalmatch.com says that any landlord who does not follow the city or state eviction procedures could be held liable for wrongful eviction and may be sued for money damages and other penalties.
The USLI Comprehensive Personal Liability (CPL) product, which includes personal injury coverage, could be used to protect property owners. In a recent claim, our insured owned several rental properties and drastically raised the rent of one of the properties. The tenants of that property claimed that the rent increased in an effort to force them to move out so that the insured’s family members could move in. The insured was sued for wrongful eviction and damages to the tenant’s property. A total of $45,000 was paid out for this claim.
The USLI Condo policy and Dwelling Fire policy also include protection against wrongful eviction claims. For instance, our insured rented one of his properties to a young, unmarried couple. After a bad breakup, the girlfriend refused to pay rent. In response, our insured evicted the girlfriend. After the girlfriend was successfully evicted, she obtained phone records indicating that the boyfriend and she had an un-contracted agreement that indicated she did not need to pay rent while she was living there. The girlfriend sued our insured for wrongful eviction, as well as additional living expenses and libel. The girlfriend was awarded $200,000 in damages.
Property owners who require additional layers of coverage could find peace of mind with the USLI Personal Umbrella product. This excess policy automatically includes personal injury coverage if it’s included on the primary policy. For those insureds whose primary policy excludes personal injury, the Primary Personal Injury endorsement would be applicable.
For an additional premium, this endorsement provides first-dollar coverage up to the CPL policy limit. In another recent claim, our insured evicted a long-term tenant with the hopes of renting the property to someone else at a higher rate. When the tenant did not vacate the premises on the requested date, our insured shut off the utilities, entered the property, disposed of the tenant’s personal belongings and changed the locks. Our insured was sued by the tenant for wrongful eviction, and the tenant was awarded a substantial sum that exceeded the limits of our insured’s primary policy. Our insured’s umbrella policy responded by providing defense costs and property damage.
In today’s society, property owners need to ensure that they have the proper coverage in place to protect against wrongful eviction claims. We all work hard for our money, and an insurance policy that includes personal injury coverage can work hard for your insureds by offering financial protection and peace of mind.
Contact your USLI Personal Lines underwriter for more details about personal injury coverage and how it can be included with our policies!
As always, thank you for your support and business.
Written by Danielle Conner
September 15, 2016
Contact Brian Hogan,
Vice President, Product Team Leader | 888-523-5545 Ext. 2388