The Importance of Personal Injury Coverage for Investment Property Owners
One of the most overlooked optional coverages available to investment property owners today is personal injury coverage. This coverage is typically not automatically included in homeowners or dwelling package policies issued today and instead must be added via endorsement.
Take the 2002 ISO Personal Liability form (DL 24 01) as an example; while this form provides coverage involving suits brought against the insured for bodily injury or property damage, it does not mention personal injury. This is the form that will, most of the time, be used to accompany the ISO Dwelling Property form (DP 00 01 or DP 00 03) when used to provide dwelling package coverage for tenant occupied dwellings.
Let’s take a brief look at the difference between “personal injury” and “bodily injury.” “Personal injury” in the insurance industry refers to non-bodily injury; that is, injury to the mental well-being of a person. “Bodily injury” refers to bodily harm, sickness or disease.
When insuring the tenant occupied dwellings of the property investor, there are many opportunities to discuss the broader coverage offered by personal injury coverage. The property owner can be sued not only for libel, slander and malicious prosecution but also for wrongful eviction and wrongful entry into their tenant occupied dwelling. Sometimes wrongful eviction can lead to mental and emotional stress for a tenant.
An eviction occurs when a landlord forcibly expels a tenant from a residence. While the majority of evictions are attributed to nonpayment of rent, landlords may evict tenants for a variety of other reasons, including property damage, nuisance complaints or lease violations, according to an Eviction Lab report. Prior to initiating a formal eviction in the court system, landlords or property owners may initiate informal methods to remove a tenant.
These methods can take many forms for the property owner and can result in the owner being held liable for wrongful eviction and may be sued for money damages and other penalties. Take for example:
- Shutting off a tenant’s heat, electric or water service
- Entering a tenant’s unit and removing personal belongings or property
- Providing flawed or inadequate notice of eviction proceedings
- Threatening or intimidating a tenant
Eviction filings and judgments are at a crisis level. CNN Money cites rental price increases annually at 7 percent and income increases near only 2 percent. In addition, increased housing prices create a tighter housing market, increasing demand for rental properties.
Princeton sociologist Matthew Desmond, the author of Evicted, mined eviction data in courthouse records and found records for nearly 900,000 eviction judgments in 2016, meaning landlords were given the legal right to remove at least 1 in 50 renter households in the communities covered by this data.
The New York Times reported “In Milwaukee in 2016, 1 in 25 renter households were issued eviction judgments. In Richmond, that number was 1 in 9.”
USLI includes personal injury coverage automatically when our Dwelling policy is issued with personal liability coverage. The Personal Injury (DL 24 82 12 02) endorsement provides protection for the property owner against “wrongful eviction, wrongful entry into or the invasion of the right of private occupancy of a room, dwelling or premises that a person occupies, committed by or on behalf of its owner, landlord or lessor.”
We understand that one of your goals as an insurance professional is to protect your clients’ households and financial assets. This could be done with a policy that includes personal injury coverage, which offers financial protection and peace of mind.
Contact your Personal Lines underwriter for additional information about our personal injury coverage on our Personal Lines 1-4 Family Dwelling product today!
As always, thank you for your support and business.
Contact Patrick Malone,
Product Leader | 888-523-5545 Ext. 2504
Written by Lisa Spitko
September 6, 2018