Guide to Rental Insurance Policies in California

We all know how real estate and insurance laws can vary from state to state in the United States of America. These laws and policies can have majorly affected people who own properties in different states, real estate agents, and any renter who shifts from one state to another or from some other country. Now, let us get started with everything that you need to know about the rules and policies of the golden state.

California in comparison to other states is considered a landlord-friendly state as it lets the landowners and real estate agents have a fair amount of leeway in how to construct the lease and plan requirements of their rental application procedure. Hence due to no compulsions from the state, all the landowners are free to ask their renters to look for renter insurance in California.

The Sutton Rule

A case decision given by the Oklahoma Court of Appeals in Sutton v. Jondahl gave the state of California very important legal precedents relating to renters insurance which directly affected the landlord-renter relationship. According to the renter insurance in California, The Sutton Rule states that “a property owner’s insurance company cannot sue a tenant for negligence because the tenant is considered a co-insured part of the property’s policy.”

While shedding some light on renter insurance in California, The Sutton rule has a very limited application here, and even if it is applied it is usually on a case-to-case basis. Even if a case is brought forward the court analyses the language of the agreement signed between the landowner and the renter, it clearly defines the responsibilities of the renter that he/she might have regarding their personal property.

California Landowners and Their Renter’s Insurance Requirement

The landowner has all the rights to ask for renter insurance in California, while the renter is under any terms of the lease. This is conducted mainly to provide protection to the landowners from lawsuits if any undesirable event occurs and it damages the renter’s belongings, and that property becomes uninhabitable. It also provides protection to the landowner from any liability, even if an injury occurs within the property.

Moreover, the renter insurance in California can aid the landlord in not facing any hassle in collecting rent timely, even if any mishap occurs renter loses their belongings due to a fire or other natural disaster occurring on the property. With the help of this insurance, the landowner gains not only additional protection for their financial interests but also provides immense protection to the tenant or renter.

What You Need to Know as California Landowner

If you want your tenant to have renter insurance in California, you will have to add a clause in the lease agreement and you will also have to make it very clear to your renter or tenant. Simply notifying your renter can lead to misunderstandings and a major chance of failure to follow through.

Following are the things that must be included in your clause

Firstly, ensure that everyone living on the property that you have leased is covered by the renter’s insurance policy and if not, they should have their own individual renter insurance in California. Secondly, thoroughly check if the type of policy that they have selected covers both personal property and liability. Thirdly, do not forget to communicate with your own insurance company for suggested coverage amounts. Fourthly, make sure that you are notified if the policy changes, is canceled, or lapses. Lastly, set your own notification requirements as what are the acceptable ways of notifying you once coverage is obtained and periodically throughout the lease term.