Does a rental companies insurance cover damages caused to an adjacent homeowners property?
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UPDATED: May 27, 2013
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Insurance Question from East Carolina University, NC
Asked on 05/27/2013
Does a rental companies insurance cover damages caused to an adjacent homeowners property? The damage was caused by a renters washing machine flooding a homeowners neighboring townhouse through a shared wall. The renter has no renters insurance.
Answer given on August 01, 2013
If your property was damaged due to water damage from an adjacent unit, the best way to handle this damage is to report it to your insurance company. Your company will assess the damage and pay for the repairs to your unit, less your deductible.Once the claim is settled, your insurance company may choose to subrogate against the person who caused the water damage. If they do not have renters insurance, they could still be held liable for the damages. If your insurance company is successful in getting repayment, then your deductible will be refunded.The rental company who placed the renter has no liability in this case. They had no negligence and they had no control over the damages caused by the renters. There is no requirement that rental companies require insurance by their renters, but it is not a bad idea to do so. The water damage is due to either a malfunction of the washing machine, negligence by the renter, or both.
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