Assure Yourself By Insuring Yourself

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Assure Yourself By Insuring Yourself

The Fair Housing Act of 1968 protects people from discrimination when renting or buying an apartment. While discrimination covers a broad range of issues including race, religion, disability, color, gender, and more, it could also center on a tenant’s familial status, criminal background, or disability. Sometimes the tenant may even perceive a rule or regulation imposed by the landlord as discrimination. In turn, this can lead to costly consequences. For example, a tenant may allege that the property owner did not provide reasonable accommodation for a disability and disallowed a service dog, when as a rule you may have a no dog policy. It is not prudent to assume that tenant discrimination lawsuits can be avoided by avoiding discriminatory behavior. You may have acted innocently but if the tenant claims that you broke the anti-discrimination law, it’s your job to prove otherwise or pay costly compensation. 

As a well-intentioned property owner, this should not be a lesson that you have to learn the hard way. There are a growing number of claims being made by tenants that do not have any basis in truth. This still leaves property owners in a no-win situation. You need to either fight the case in court or settle it out of court.

Thankfully there is another way out:- tenant discrimination insurance. As a result of the risks they face in conducting business, tenant discrimination insurance is becoming an important coverage for property owners. Such policies protect the property owner against tenant claims while also covering legal costs and any settlement up to the limit of the policy. 

It is important to know that tenant discrimination isn’t a standard inclusion in all policies.  For example, a general liability policy or even an employment practices liability policy does not cover tenant discrimination insurance claims. There are enough and more cases where tenant discrimination claims have been denied under these policies. It is important to choose a property management insurance coverage that covers tenant discrimination claims or even to purchase a tenant discrimination insurance as a stand-alone. 

The Benefits of Tenant Discrimination Insurance

  1. If as a property owner you are wary of the costs involved, the cost of insurance isn’t prohibitive at all in comparison to the potential costs of discrimination lawsuits. 
  2. There are insurance companies that even cater to clients who own 250 or fewer units and are not looking at paying high premiums and do not already have comprehensive insurance coverage. 
  3. The good news is that tenant discrimination insurance can, in some cases, be added to some existing policies, such as Errors and Omissions. 
  4. Besides protecting owners, directors, partners, and shareholders, some policies, also extend coverage to property managers and some employees is an added perk.

While it is unfortunate that law-abiding property owners could be forced to defend themselves against tenant discrimination lawsuits that may have no basis in truth, tenant discrimination insurance is a property owner’s best defense against wrongful discrimination claims.


Trevor Henson is the founder of several property management companies and is the current Chief Marketing and Innovation Officer at Beach Front Property Management in Long Beach, CA. He is a CMO, entrepreneur, Trojan, EO LA member, investment property addict, change agent, and bourbon aficionado.