While we were quoting a Colorado Springs renters insurance policy, we got a rather interesting question from a prospective insured. He asked,
Does renters insurance stop my landlord from suing me? Isn’t that the point of liability insurance? Can my landlord sue me if I have renters insurance?
That’s a pretty interesting question, with answers that depend a bit on the situation. Let’s take a look.
Does Renters Insurance Stop My Landlord From Suing Me?
Does having renters insurance prevent your landlord from suing you? Does it matter why he’s suing you? Find out the answer from your renters insurance experts!
Does Renters Insurance Stop Your Landlord From Suing You?
The point of insurance is not to prevent someone from suing you, though if a claim is brought to the insurance carrier before a suit is filed then settlement is likely. Renters insurance, and insurance in general, serves two main purposes with regards to liability. The more well known part is actually dependent on the lesser known part. If a claim or suit is brought against you, within the scope of the policy coverage, the insurance company will defend you against that suit.
Why does the insurance carrier paying a liability claim depend on the carrier providing a defense to the claim or suit? Because the insurance company has the legal right and responsibility to minimize the costs and avoid paying questionable liability claims. By defending you, the insurance company is also defending all of their policyholders by minimizing the amount of the claim they’ll eventually have to pay. For an insurance carrier to pay a claim, they need to be notified before it goes to trial, and be given the opportunity to handle it.
However, there are some suits that renters insurance will not defend against or pay for related claims. For example, the most common landlord-tenant dispute of all, proceedings related to unpaid rent. That’s clearly not covered by your renters insurance and as a result, the carrier has no obligation to defend the suit on your behalf because they’re not obligated to pay if you lose the suit.
Generally speaking, renters insurance does not necessarily stop your landlord from suing you, but it often does. It also provides a defense if the suit does get filed, as well as pays the judgment resulting from that.
To find out more about what renters insurance does and does not cover, and how it benefits you, please call Effective Coverage at (800)892-4308 or click above for online renters insurance quotes.