One of the most common questions our property managers hear from owners is about their insurance coverage. These conversations usually come up when someone is turning their primary residence into a rental and assumes their existing homeowners insurance will still protect them.

In most cases, it will not.

If you rent out a property in Orange County, switching from homeowners insurance to landlord insurance is one of the most important steps you can take to protect your investment. The two policies are designed for different situations, and using the wrong one can leave serious coverage gaps.

At Good Life Property Management – Orange County, we work with rental property owners across Irvine, Anaheim, Huntington Beach, Costa Mesa, and surrounding cities. While we do not sell insurance, we regularly see how the right policy protects owners and how the wrong one creates unnecessary risk.

Here is what Orange County property owners need to understand.

What Is Homeowners Insurance?

Homeowners insurance is designed for owner occupied properties. It assumes that you live in the home full-time.

A standard homeowners policy typically covers:

  • The structure of your home
  • Your personal belongings
  • Personal liability protection
  • Additional living expenses if you are displaced

This coverage works well when you are living in the property. However, once you move out and place a tenant in the home, the risk profile changes significantly.

Insurance companies consider rental properties higher risk because:

  • The owner is not onsite
  • Tenants may not maintain the property the same way
  • There is increased liability exposure

If your insurer is not informed that the home is now tenant occupied, a claim could be denied.

What Is Landlord Insurance?

Landlord insurance, sometimes called a dwelling policy, is built specifically for rental properties.

Instead of protecting an owner occupant, it protects the property owner as an investor.

A landlord policy typically includes:

  • Coverage for the structure
  • Liability protection related to tenant occupancy
  • Loss of rental income coverage

Unlike homeowners insurance, landlord insurance does not cover a tenant’s personal belongings. That responsibility falls to the tenant through renters insurance.

Our Insurance Requirements for Owners

To ensure proper protection for both you and our management team, we require the following:

  • A minimum of $500,000 in personal liability coverage
  • Active dwelling or property damage coverage
  • Good Life Property Management listed as Additional Insured
  • Additional Insured status added within 7 days of management beginning or the property becoming vacant

These requirements are designed to protect your investment and prevent costly coverage gaps.

What Does “Additional Insured” Actually Mean?

Insurance terminology can be misleading. There is a significant difference between the following:

Additional Insured

This extends liability coverage under your policy to Good Life Property Management. If a claim occurs, both you and our company are covered under the same policy.

Additional Interest or Certificate Holder

This only provides notification rights. It means we are informed if your policy changes, renews, or cancels. It does not provide liability coverage.

Only Additional Insured status provides shared protection.

Why This Is So Important

As your property manager, we act on your behalf in leasing, maintenance coordination, vendor oversight, and property operations.

If an incident occurs, such as:

  • A tenant injury
  • A fire
  • A burglary
  • A property damage claim

Lawsuits often name both the property owner and the property manager.

If we are not listed as Additional Insured:

  • Our insurance company would have to step in separately
  • Our insurer could pursue reimbursement from you
  • Your insurer could push liability back onto us
  • This creates an adversarial dynamic between owner and manager

When we are listed as Additional Insured, we are on the same policy, working with the same carrier. Legal defense is streamlined, efficient, and more cost effective.

This requirement exists to protect both of us.

“Can’t You Just Use Your Own Insurance?”

We do carry business insurance, including General Liability and Errors and Omissions coverage.

However, property managers cannot insure property they do not own. Without being listed on your landlord policy, there is a gap in coverage related to your specific property.

If we were forced to rely solely on our own insurance for incidents at managed properties, our liability would be so high that it would eventually make us uninsurable. That would prevent us from managing properties at all.

Listing us as Additional Insured protects the long-term stability of our management relationship.

What If My Insurance Company Won’t Add Additional Insured?

This usually comes down to the type of policy you have.

Many owners still carry a standard homeowners policy, often classified as:

  • HO-3 for single family homes
  • HO-6 for condos

These are designed for owner occupied properties and most carriers will not add an Additional Insured to them.

Rental properties typically require a different policy type, commonly called a DP-3 policy, which is specifically built for tenant occupied properties.

In many cases:

  • Tenant occupied policies are less expensive than owner occupied policies
  • They exclude coverage for the owner’s personal belongings
  • They may include optional loss of rental income coverage

If your carrier does not offer landlord policies or refuses to add Additional Insured status, you may need to switch providers.

If all else fails, we offer an alternative solution through our Master General Liability program, SureVestor, which provides supplemental protection.

What If I Am Enrolled in SureVestor?

If you are enrolled in SureVestor, you may reduce your personal liability coverage below $500,000 because the SureVestor policy provides $1 million in coverage.

However, if you ever cancel management services, you should immediately increase your liability coverage again to maintain adequate protection.

Common Owner Questions

“Why does this matter for me?”

Because lawsuits rarely target just one party.

When a claim happens, both the owner and property manager are often named. If we share coverage under the same policy:

  • There is one carrier
  • One legal defense strategy
  • Reduced conflict
  • Faster resolution

It simplifies the process and protects your financial interests.

“Does this cost me extra?”

In most cases, adding an Additional Insured endorsement does not increase your premium. It simply extends liability protection to your managing agent.

Who Is Insuring California Right Now?

The California insurance market is challenging. Many major carriers have paused new business in the state, especially for homeowner and landlord policies. Underwriting guidelines are stricter, wildfire exposure is heavily scrutinized, and some companies are simply not writing new policies at all.

Based on our recent, real world experience helping owners secure compliant landlord coverage, here is what we are currently seeing.

Carriers Currently Writing New Policies

These companies are actively writing policies in California and have been workable for rental property owners.

  • Steadily: Highly recommended. They are landlord focused, competitive on pricing, and have no issue adding Good Life as Additional Insured. Deductibles are typically around $2,500.
  • Obie: Currently writing new landlord policies in California. Designed for rental property investors and generally easy to work with.
  • Insurify: Will insure condos. Be aware that deductibles tend to be higher, often starting at $5,000 or more.
  • USAA: An excellent option with strong coverage and service. However, it is only available to current military members and veterans.
  • Lightspeed Insurance: A good option for single family homes. Coverage is typically limited to fire, wind, and vandalism. They do not insure condos.

Carriers with Restrictions (Yellow Light)

These companies may write policies, but with conditions or limitations.

  • Amica: Will insure a rental property only if they also insure your primary residence.
  • Mercury: Often requires bundling with auto insurance in order to issue a landlord policy.
  • AIS Insurance: Acts as a broker for the California FAIR Plan. This is often used for properties in high fire risk zones. Be aware that FAIR Plan applications can take several weeks to process.
  • Honeycomb: Only writes commercial insurance policies for properties with five or more units. They do not insure individual condos or small residential rentals.

Carriers Not Writing or Difficult to Work With (Red Light)

These companies are currently not writing new landlord business in California or present significant challenges.
  • Liberty Mutual and Travelers: Not writing new business in California.
  • American Family: Not insuring properties in California.
  • Geico: Not writing new California policies and will not add a property management company as Additional Insured.
  • Lemonade: Fully online platform. We have seen consistent negative feedback regarding claims handling and overall service. We recommend avoiding this option.

What This Means for You as an Owner

The insurance landscape in California is fluid. Availability can change by ZIP code, property type, claims history, and wildfire exposure.

Because of these market conditions:

  • Start the insurance process early
  • Confirm the policy is a landlord or tenant occupied policy, not a homeowner policy
  • Verify that Additional Insured endorsements are allowed before binding coverage
  • Be prepared for higher deductibles than in previous years

If you are having difficulty finding coverage that meets our requirements, we can provide broker referrals and discuss backup options such as our SureVestor Master Policy.

The key takeaway is this: coverage is still available in California, but it requires the right carrier, the correct policy type, and proactive planning.

Bottom Line

Requiring Additional Insured status is not about adding complexity. It is about alignment.

It ensures:

  • Shared protection
  • Clear legal defense
  • Reduced risk of conflict
  • Stronger long term protection for your investment

If your carrier can add us easily, great. If not, we will help you explore alternatives so you are never left exposed.

If you have questions about your policy or need guidance on meeting these requirements, contact our team. We are here to help protect your property the right way.

Frequently Asked Questions

Do I really need landlord insurance if I used to live in the home?

Yes. Once you move out and place a tenant in the property, your homeowners insurance is no longer structured for the risk involved. Rental properties carry different liability exposure, and most standard homeowner policies will not properly cover tenant occupied homes. You should switch to a landlord policy before the tenant moves in.

What happens if I keep my homeowners insurance and don’t tell my carrier?

If your insurance company is not informed that the property is tenant occupied, a claim could be denied. Insurance policies are written based on occupancy type. Misrepresenting occupancy, even unintentionally, can create serious coverage problems during a claim.

What type of policy should I have for a rental property?

Most rental properties require a landlord or dwelling policy, often referred to as a DP-3 policy. This is different from:

  • HO-3, which is typically for owner occupied single family homes
  • HO-6, which is typically for owner occupied condos

A landlord policy is designed specifically for tenant occupied properties and includes liability and optional loss of rental income coverage.

Why does Good Life need to be listed as Additional Insured?

Because property managers are frequently named in lawsuits alongside property owners.

If we are listed as Additional Insured, both parties are defended under the same policy by the same carrier. This keeps legal strategy aligned, reduces disputes between insurers, and protects both you and your management team.

Without Additional Insured status, separate insurance companies may become involved and potentially attempt to shift liability back and forth.

Is Additional Insured the same as Certificate Holder?

No.

A Certificate Holder or Additional Interest only receives notification if the policy changes or cancels. It does not provide liability coverage.

Additional Insured extends liability protection to Good Life under your landlord policy. That is the protection required.

Does adding Good Life as Additional Insured increase my premium?

In most cases, no. Many carriers add an Additional Insured endorsement without increasing the premium. However, this depends on the carrier and policy type.

Can I lower my liability coverage if I enroll in SureVestor?

Yes. If you are enrolled in SureVestor, you may lower your personal liability coverage below $500,000 because the SureVestor program provides $1 million in coverage.

However, if you ever cancel management services, you should increase your liability coverage again to maintain proper protection.

What if I cannot find a carrier that will add Additional Insured?

The California insurance market is tight, but compliant policies are still available. You may need to:

  • Switch to a landlord specific policy
  • Work with an independent broker
  • Consider specialty carriers
  • Use the California FAIR Plan with supplemental coverage if you are in a high fire risk area

If necessary, we can provide broker referrals or discuss alternative solutions.

Should my tenants carry renters insurance?

Yes. Renters insurance protects the tenant’s personal belongings and provides liability coverage for the tenant. It does not replace your landlord insurance. Requiring renters insurance helps reduce overall risk exposure at the property.

What liability limit should I carry?

We require a minimum of $500,000 in personal liability coverage unless enrolled in SureVestor. Depending on your asset profile, you may also consider umbrella coverage for additional protection.

Why is insurance more difficult in California right now?

Many major carriers have paused new business in California due to wildfire risk, rising rebuild costs, and regulatory pressures. This has tightened availability and increased deductibles in some cases. Planning early and working with experienced brokers can help you secure compliant coverage.