Adding a Property Manager as Additional Insured on the Owner’s Insurance Policy

Adding a Property Manager as Additional Insured on the Owner’s Insurance Policy

One of the most important reasons landlords hire a property manager is to help limit exposure to and manage the inherent risk of owning rental property.

Often, questions arise as to why it’s important to add the property manager as Additional Insured on the Homeowner’s or Property Owner’s insurance policy.  Some of the key questions are addressed below.

Why should I list my Property Manager as Additional Insured on my Insurance Policy?

Experienced and well-informed management firms are increasingly requiring the property owner to add the Property Management Company as Additional Insured on the owner policy.  While often overlooked out of convenience or misinformation, it is a very important element of an overall risk management strategy not only for the property management company but also for the property owner.

What does “Additional Insured” mean?

The Additional Insured verbiage on a homeowner’s policy simply means that the coverage is extended not only to the owner of the property but also to the listed agent or Management Company.  Some insurance agents and property managers will confuse “Additional Insured” with “Additional Interest”.  They sound similar but are vastly different.  “Additional Interest” does not extend coverage but will simply notify the property manager of policy renewals, cancellations, or policy changes.

Another common misconception is that the Additional Insured verbiage will provide the property management firm with a financial interest in the property.  Unlike a mortgage holder, the property management company does not have, or want, a financial interest in the property but nevertheless has a very insurable interest from a premises liability standpoint such as personal injury on the premises.

property manager sitting at their desk looking over documents

Why is adding the Property Manager as Additional Insured important to the property owner?

When a property manager is hired they take on almost all of the responsibilities as if they were the homeowner.  As such, if something were to go wrong, such as personal injury, the Property Manager is often the target, in place of the owner, of any resultant litigation.

For this reason, almost all reputable property management firms have a strong indemnification and hold harmless clause as part of their management agreement.  If the management company is properly listed as Additional Insured, the coverage will automatically be extended to both parties as needed.

In the worst of cases, if a major litigation claim takes place, it is likely that both Property Manager and Owner would be named as co-defendants.  Having the owner policy extended to both would create a unified defense, with one insurance company defending both, streamlining the defense process and significantly reducing total legal expenses for all for which the owner (or the insurance company) is ultimately responsible.

Why is the Additional Insured endorsement on the owner’s policy important to the Management Company?

Most Property Management firms carry General Liability Insurance as well as Professional Liability insurance which will offer protection from a financial loss caused by a mistake or wrongful act by the Management Firm.  However, these policies don’t provide protection against matters concerning the home itself.  This leaves the property manager vulnerable to claims regarding someone injuring themselves at the property, burglary, fire, water leaks, etc.  When coverage is effectively extended to the Property Manager through the Additional Insured endorsement, the problem is solved.

person signing a document

Without the Additional Insured endorsement, the management company could be left to fend for itself and then seek reimbursement from the owner directly (or their insurance) for any losses under the indemnification clause. Needless to say, this alternative would be exponentially more expensive and time-consuming for all.

Are Insurance Companies willing to add the property manager to the owner’s policy as Additional Insured?

Most of the larger insurance companies understand that doing so is in their customer’s best interest and will add the property management firm upon request for little or no additional cost.  However, some of the smaller or specialized companies view adding a third party to the policy as taking on additional risk and refuse to do so.

While there may be some merit to their viewpoint, it can be argued that using a professional management company will reduce overall risk and that since the owner is indemnifying the management company, they would eventually be faced with a payout on behalf of their customer.   Accordingly, their total cost of a payout could be significantly reduced if they are in control of the claim from the beginning.

Helpful Tips for Setting Up Insurance For Your Rental Property:

  • Make sure that your Insurance Agent understands that you are requesting the Property Management Firm be added as “Additional Insured”, not merely “Additional Interest”.
  • Ask if there is an additional charge for the “Additional Insured” endorsement.  If there is you may want to shop around but remember that the overall cost-effectiveness of your policy may still be better even with an additional fee.
  • Ask your Insurance Agent if there are any other products their companies offer that may be useful to you, i.e., lost rent protection, upgraded commercial policy, etc.
  • If your property management company is contending that an Additional Insured endorsement on your policy is not important, carefully question their rationale and be sure you’ve contemplated the risk.

If we can answer any further questions please contact the T-Square Properties Office at 425.485.1800 or

Disclaimer:  It is always recommended that you seek the advice of a local attorney to more about real estate laws and how they can impact you and your property.

What Exactly is “Normal Wear and Tear?”

What Exactly is “Normal Wear and Tear?”

Using an object over time contributes to its aging and damage. This is generally referred to as normal wear and tear.

Property is also subject to this type of depreciation. It occurs to all rental properties when a tenant occupies it and uses your furniture and home appliances for example.

As a landlord in Snohomish County, it’s your prime responsibility to manage the necessary repairs, maintenance, and upgrades to keep normal wear and tear under control.

However, damages caused by tenants are exempted from a landlord’s duty to repair. (more…)

7 Reasons You Should Require Renters Insurance in the Lease

7 Reasons You Should Require Renters Insurance in the Lease

Many renters in the U.S still think that a renter’s insurance isn’t necessary, which is often a huge mistake. This is at least according to an article by Forbes.

Two reasons could try to explain this. One is that tenants are usually under the impression that the landlord’s insurance also covers their belongings. Unknown to them, this is not so.

Landlord insurance only covers structural damage to the home due to any covered perils. Such perils include snow, hail, wind, or fire.

Requiring your Snohomish County, Washington tenant to have a renter’s insurance is certainly worthwhile. It can cover property damage resulting from a covered peril.

So, in today’s post, we are going to look at 7 reasons why you should require renter’s insurance in the lease. (more…)

The Benefits of Hiring a Property Management Company

The Benefits of Hiring a Property Management Company

Seattle has one of the best real estate markets in the US. In 2015 alone, over one million new renters signed rental lease agreements in the city. This increased demand for housing naturally attracts property investors and higher rental prices. In fact, the prices have shot up significantly, with some properties even witnessing unprecedented percentage increments. With this new found fortune, it is easy to conclude that Seattle landlords are a happy lot. Well not all of them are. Even though the market seems to be on a bubble, some property owners still have to ensure the investment stays in good condition, deal with problematic tenants, handle the finances, source quality clients and comply with regulations. Furthermore, they have to compete with other landlords in the area.

No wonder knowledgeable property owners contract experienced property management companies to run the investments. If you are a property owner, you too should consider hiring a competent property management company and enjoy the following benefits.

1) Peace of Mind

Managing a rental property is challenging and at times utterly frustrating, more so when you have difficult clients, or you are unable to attract tenants to your property. There is also always the likelihood of property damages and other complications arising. If you, as the property owner, try to address these issues by yourself, you can certainly become stressed and overwhelmed. However, by enlisting a reliable property manager you will have transferred all the rent related headaches to him or her. Leaving you peaceful and free to attend to other equally important matters.

2) Active Property Marketing and Advertising

A frustrating time for a rental property owner is when the home becomes vacant, and there are no interested clients. At such a time, most landlords have to interrupt their daily schedules to market and advertise the vacant property. The opportunity cost of the empty house doubles since besides missing out on the rental income, the landlord has to commit his/her time and resources. Fortunately, you can avoid all these challenges with the help of a competent property manager. They know what kind of advertising and marketing tools are ideal and useful on your property.

3) Quality Tenant Screening and Placement

Every landlord longs for good quality occupants for his or her property. Unfortunately, most rental property owners have trouble screening new tenants carefully. This can happen either due to the urgency of filling the vacant property or lack of screening skills. Consequently, the tenant may end up being problematic much to the dismay of the landlord. Property managers, however, have a well-developed screening criteria that is equally applied to all prospective tenants. The screening criteria can easily pick out the red flags and weed out the potentially problematic tenants, leaving you with quality clients. In addition, in the rare case that there is a disgruntled tenant they will have the pleasure of dealing with their issues.

4) Avoid Legal Problems

A troublesome tenant can easily get a landlord into serious legal and financial problems. For instance, the tenant could sue for lease termination, eviction or seek compensation for injuries resulting from the landlord’s negligence. Professional property managers are conversant with various Seattle rental property codes and regulations such as the HBMC (Housing and Building Maintenance Code) and the RRIO (Rental Registration and Inspection Ordinance). They will offer advice on the best course of action concerning tenant screening, evictions, lease terminations, security deposit handling, rent collection as well as property safety and hygiene. Their up-to-date knowledge will keep you from facing legal suits or paying hefty fines.

5) Improved tenant retention

Even high-quality tenants can choose not to extend their lease if they are unhappy with the property. If you want your clients to stay to the full length of the lease and even seek for a contract extension, look for a qualified property management firm. Most property managers have sufficient tenant-retention policies, which guarantees the tenant stays happy and willing to extend the contract beyond the lease period.

6) Improved Accounting and Bookkeeping

A property management company will keep accurate financial records on your behalf. Such records include rental incomes, penalties, as well as expenses for repairs and utility services. Moreover, the firm will help you with your taxation filing, identify your tax deductible areas and also aid in the preparation of the claim doc.

7) Tighter rental collection processes

The success or failure of your rental property investment depends largely on how you handle the rental income. The tenant must comply with the rent payment terms such as making payments in time. At times as a landlord, you can be too lenient in accommodating late payments, which might act to your disadvantage. However, if you contract a property management company, the firm will strictly enforce the rent payment terms, penalize the tenant for late payments or returned checks and even serve the occupant with an eviction notice when needed. They take the stress out of having to chase after your tenants for rent each month.

Overall, a property management company allows you to relax and enjoy passive income from your investment rather than spending your time and effort maintaining your property and keeping your tenants satisfied.

Submitting a Successful Rental Application

When most people see a rental advertisement, they mistakenly presume that getting the property will be as straightforward as calling the phone number on the ad, and availing the rent and security deposit. In reality, however, it is a little more complicated than that.

For starters, there is a high demand for rental properties, which means you will not be the only one interested in moving into the property. Secondly, although the landlord desires to fill the vacant unit as quickly as possible, he or she wants nothing short of high-quality residents. Therefore, the owner will rigorously screen all applicants and scrutinize their rental application documents to identify qualified tenants.

In fact, many landlords determine their tenants, depending solely on the rental application. For this reason, it is critical to know how to prepare and present a successful request when looking for a house to rent.

Steps for submitting a successful Rental Application 

1. Make a lasting first impression

Bearing in mind that you are most probably not the only interested applicant, leave nothing to chance. Do all you can to strike a good rapport as soon as possible with the property owner or agent. For instance, dress presentably and arrive early for the showing. Moreover, be polite, friendly, charming and enthusiastic during the showing.  It is always best to start off on a positive!

2. Read and Understand the Landlord’s Screening Criteria

Once you decide that you want the property, the next step is to fill out the rental application. Although the application documents serve one primary purpose; to help landlords and/or the screening companydetermine if the applicant will likely have the means to pay rent, take care of the property, and be a responsible tenant, they might differ in content, structure, and requirements. It is, therefore, prudent to take the time to understand the owner’s screening criteria and application guidelines to ensure that you satisfy the requirements. Doing so will help boost your chances of sailing past all the vetting stages.

3. Fill out the application form as honestly and completely as possible

The Rental Application can be a downloadable copy or an online form. Whichever the case might be, take your time and fill it out accurately, completely, and truthfully.. Naturally, you might want to sound persuasive. However, when it comes to rental property, honesty facts remains the best policy. Remember, the screening company is going to do a comprehensive background check on you. If they discovers any contradiction or discrepancy during the screening, your application may be disqualified.

4. Attach all the necessary documents 

Use the landlord’s screening criteria as a guide to assemble all the required documentation. Many tenants, probably motivated by the urge to impress, often provide additional documents which the landlord or agent did not demand. Refrain from doing that and only provide the requested documents. If you feel the landlord did not ask for documents which you believe can help boost your chances, it is prudent to mention those documents in your discussions with the landlord. But generally speaking, stick to the guide.

Some of the relevant documents include

i. Reference Letters

You may need to provide good references from real estate agents, property managers, employers, colleagues, previous landlords and former neighbors. The references will demonstrate to the agent that you are a reliable and trustworthy resident that they can count on to pay their monthly rent and keep the property in good condition.

ii. Payslips or Proof of Income

You need to convince the screening company that you are financially stable and able to pay the rent. Effective ways of doing that include availing your past pay slips, bank statements, or even an employment letter from your employer.

iii. Proof of Identification

The screening company needs to confirm that you are indeed who you claim to be. Hence, they might request you attach a photo and copies of your identification documents such as the Governement Issued ID, drivers’ license, or passport.

iv. Pet references

In case you have a pet, you might have to provide a pet reference from your current or previous landlord, detailing the condition in which you left the property and the level of disturbance if any, your pet caused. Some landlords might also require a pet deposit or purchase pet liability renter’s insurance.

v. Deposit or Rental Ledger

In addition to the references from your previous landlord or property agents, you may need to provide a summary of your rent payment history. In most cases, how far the payment history should go will depend on the agent and the length of duration that you have been a tenant. If this is required, the details of what is required will be included in the rental application, so make sure to read the application in its entirety.

vi. Credit Rating 

When it comes to credit score, various property managers might approach it differently. Some would ask you to provide your current credit score rating, while others might run your credit check themselves. If the check reveals a poor score, some landlords might out rightly reject your application. Others, however, may ask you to provide a financial guarantor who has excellent credit. If you know that your credit score may be an issue, try to arrange for a financial guarantor before submitting your rental application in order to make the process as easy as possible.

5. Verify your application before submitting

Before you tender your application, it is prudent to review it and confirm that it is worth sending. Ask yourself whether it meets the landlord’s screening criteria, if you have included all the necessary documents, and whether the information is accurate and devoid of grammatical and spelling errors.

6. Follow-up

At least three days after submitting your tenant application documents, send a follow-up to the landlord or agent inquiring about the fate of your request. While at it, respectfully reiterate to them your desire to lease the property, and your willingness to produce any additional information they may require to guarantee a successful rental application.

If you follow these guidelines while preparing your rental application, it should give you an advantage over many other applicants. While a successful rental application alone may not lead to securing the property, it definitely helps the screening company’s decision in deciding whether you are qualified to rent the property.

How Clean Does My Rental Need to Be When I Move Out?

You have already concluded your tenancy and are in a hurry to move out. It’s an exciting moment- moving out of your old place into a new one.

The last thing you want is anything that can hold you back; like cleaning up the rental. It might be tempting to leave a huge mess behind but there are consequences to it; your landlord may cut your deposit.

Of course, this is not something you would want to happen. Furthermore, it’s your obligation as a tenant to leave a clean rental, just the way you found it.

Here are some rental cleaning tips that will ensure you get your full deposit back.

1. Make It Look Like It Did the First Time You Moved In

When you first moved in, you found every single inch of the rental spotlessly clean. If you would have found it in a mess, you would have definitely raised a complaint to the landlord. So, it makes sense to leave the rental super clean in preparation for the next tenant.

The floor or carpet will seem a little old and worn out, but this is absolutely acceptable. What’s not acceptable is leaving the carpet or floor with a huge stain. The landlord might deduct from your deposit. So be sure to leave everything in good condition.

2. What to Clean: A Cleaning Checklist

Clean up as much as possible and remove all your belongings prior to cleaning. It will make it easier to clean since there will be fewer items to work around, and will also help you complete a more thorough cleaning job.


• Clean all kitchen appliances, cabinets and liners

• Clean and shine up the faucet and sink

• Clean and sanitize all countertops

• Clean the dishwasher if you have one

• Unplug all appliances and sweep behind them

• Scrub the floor and walls



• Clean the toilets, sinks, faucets, bathtubs, and showers

• Scrub the bathroom floors; remove scum off bathroom floor tiles, clean the shower and tub, bleach the grout

• Vacuum the surface of the exhaust fan to remove dust

• Clean the mirror with a glass cleaner

Bedroom/Living Room

• Dust, sweep, vacuum, and mop every single inch of the living room and bedroom

• Wipe down the windows and the walls

• Remove floor or carpet stains

Even if you have cleaned the entire place, don’t forget to remove all the trash. Otherwise, your landlord will charge you for its removal.

3. Revisit Your Rental Agreement

Your rental agreement may contain important details regarding some of the things you need to do before moving out. Review the agreement and check if there is a move-out checklist.

If you rented your house or apartment from a management company, ask them if they have a mover’s checklist to ensure you clean up as required. They may also have this information on their website, make sure you read through.

Most landlords or management firms require the tenants to do a final walk-through to ensure the property is left in good condition. So, be sure to read through the procedure.

4. I Don’t Have Time to Clean- What Options Do I Have?

Moving out can be overwhelming, tiresome, and might take you a lot of time to complete. If you have a job or business to manage, you might not find time to clean the place.

In such a case, you can opt to hire a cleaning company to do the cleaning for you. Be sure to provide the cleaning team with a copy of your landlord’s move-out cleaning checklist. You can also create one if you can’t get one from the landlord.

Before hiring the cleaning company, it’s important to negotiate the cost of the project to avoid surprises once the job is done. Also, hire a company that can clean the place at a respectable cost.

And if you decide to do the cleaning yourself, be sure to schedule the cleaning during the last paid month of your tenancy. It’s much more convenient as you will be able to do the final walk-through and give back the keys.

5. Will I Get the Full Deposit When Moving Out?

Yes. You will get your full deposit back, but only if you have cleaned up properly and returned the rental to its former glory. However, if you leave a mess behind or any damage, the landlord has the right to cut your deposit to pay for repair charges. The charges may include cleaning up the whole house/apartment, carpet cleaning to remove hard stains, repairing broken appliances or repainting the walls.

Because every state has put in place specific rental laws regarding what the landlord is supposed to deduct, make sure you confirm with your state to ensure your deposit is not reduced unfairly.

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