In Washington state residential tenants have typically been considered co-insured under the landlord’s insurance policy. When this is the case the landlord’s insurance company cannot attempt to collect from the tenant, especially in cases of tenant-caused fires. A new law was passed changing the Landlord Tenant Act, HB 2064, as of June 9, 2022.
The bill includes a clause that if the insurance company compensates the landlord for a valid claim for losses such as unpaid rent or damage, the landlord may not be able to seek reimbursement from the tenant for the amount paid to the landlord.
The new law requires the landlord to disclose the terms of the insurance policy prior to attempting to collect from the tenant. Even if the lease states that the tenant is excluded from coverage under the landlord’s insurance policy, if the terms of the policy provides coverage in the event the tenant does not pay for tenant-caused damage, the clause may be invalid.
The bill is complicated and includes specific steps that must be made before attempting to collect from a tenant for some losses. The assistance of the insurance broker and/or an attorney will likely be required.
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Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.