Maryland has made an attempt to outlaw additional insured status for landlords. The bill died in committee in the 2014 session, but Annapolis seems to be bent on making it happen in 2015. What will it mean to you as a landlord when Maryland outlaws additional insured status for landlords?
To start with, we believe that additional insured status is not what a landlord wants. We’ve written at length on additional interest vs. additional insured. But putting that aside for a moment, let’s take a look at some of the impacts of no longer being able to use a lease that requires additional insured on a tenant’s insurance policy.
First, of course, you’ll have to rewrite your lease after review by your attorney. But you should be having an attorney review that document on an annual basis anyway, so that’s only a minor issue.
The enjoyable part, of course, will be explaining to your residents when their leases come up for renewal why they need to make a change to their policy. Why? Most tenants are not risk managers, and neither have nor want to have a full understanding of the insurance industry and how their policy interacts with yours in the event of a liability loss. You’d be well advised to train your leasing agents well on the change, and the reasons for it, and on how to clarify it to residents.
How do you protect yourself when additional insured status is outlawed by the people you elected in Annapolis? You need to know if the policy lapses or cancels, of course. You also need to be made aware of renewals without the resident having to trek down to the leasing office and bring you a copy. And then there’s the small matter of tracking all of that.
If Maryland can outlaw additional insured status for landlords, which seems reasonably likely this session, you need a tracking platform that can integrate current records, track and verify renewals, send out customized compliance notifications, and centrally process all of the renewals, cancellations, and other mail that each policy generates. Your leasing agents don’t have time for those things, and we suspect you’d rather not hire an additional person or two just to deal with them.
That’s where Effective Coverage comes in. With a long history of helping communities track and enforce Maryland renters insurance requirements, Effective Coverage offers a platform that handles all of those things, in addition to generating reports in real time on compliance levels. The system can even handle transitional stages, such as flagging whose lease still requires additional insured and whose lease has the updated additional interest requirement. Residents may buy policies from the provider of their choice, but Effective Coverage policies are competitively priced.
To learn more about our solutions for managing insurance, or to find out more about the attempts to outlaw additional insured status on Maryland renters insurance, contact Effective Coverage at (800)892-4308 extension 3.