Assure Yourself By Insuring Yourself

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Assure Yourself By Insuring Yourself

The benefits of tenant discrimination insurance

Martin Luther King Jr. is remembered even today as one of the most visible activists and leaders of the civil rights movement up until his death in the late 60s. His assassination and events immediately afterwards brought forth the signing of the Civil Rights Act of 1968, which is remembered important to all property managers to have introduced the Fair Housing Act. The Fair Housing Act protects people from discrimination of race, color, religion, sex, familial status, disabilities, or national origins, when renting or buying a home.

But why bring this up now? If the reason for this act is to remind owners not to discriminate, it should be as easy as allowing any tenant to rent so long as they pass a background check that includes financial status and credit scores. Unfortunately, it’s not that simple. According to the Fair Housing Alliance 2018 Report, 87.4% of housing discrimination acts reported in 2017 occurred during rental transactions. Tenants can percept possible discrimination of themselves due to sensitivity of treatment, and even if a claim is frivolous or groundless, property owners and managers would benefit from having a defense against these types of allegations. Says Tameka Livatino, AVP Midwest Region of NAS Insurance “We often find that property managers or owners don’t tend to discriminate. What happens is, they impose a rule or regulation on their property, which is perceived by a tenant as discrimination.” If found guilty of a violation of the Fair Housing Act, the fees can be costly: $11,000 in civil penalties for a first offense, and $55,000 for each additional offense.

Because of the high costs, even an accidental mistake can affect your business when it comes to discrimination – enter tenant discrimination insurance. According to Stan Burns Insurance, tenant discrimination insurance can be added to an existing business policy, such as Errors and Omissions. Tameka Livatino again states “Quite frankly, the discrimination portion of the property managers’ E&O is where we see the most claims. If you own or manage a property and your evaluation process is considered discriminatory in any way, a claim can be filed, leading to a costly defense process.” Check some of the companies linked below to get more information about investing in tenant discrimination insurance.