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Insurers sit back and wait, legislators consider mandatory coverage

landlord helpIt can cost $50,000 to exorcise bedbugs from an apartment building.  A 217-unit co-op in New York paid $250,000.  And then, more bugs show up and the cycle begins anew.

The financial cost of remediation of this epidemic is as frightening as finding the tiny creatures in a person’s bed.  Unfortunately for landlords, this clean-up cost in generally not insurable.  Most insurance policies, including renters insurance, either specifically exempt bug infestations, or consider pest removal a maintenance item rather than an accident.  However, medical expenses or damages from lawsuits  may be covered in a liability policy – but that is disputed by some insurance carriers.

While bedbugs generally don’t cause physical harm like disease,  there is no denying the “yuck-factor” when it comes to tenants who find the bugs or who have to slather on anti-itch cream for a few days.  To make matters worse, these little nuisances are incredibly adept at hiding – they can disappear for a year or more in minuscule cracks and floorboards, and few pesticides on the market actually do them in.  To attract bedbugs, all a tenant has to do is go to the movies, travel, or spend a night in a hotel room, and the bugs stowaway undetected in clothing or suitcases ready to make their new home in rugs, bedding or upholstered furniture.  Subject to wanderlust, they will walk remarkable distances into other units and common areas, often through carpeting.  A health inspector reported that bedbugs came home with her in her briefcase.

In January, New York State’s Legislature will consider a law requiring insurance companies to provide bedbug insurance for property owners that will cover the costs of bedbug remediation. If it passes, this legislation will undoubtedly become the model in other states, especially those hit hard with infestations like California and Ohio.

Not surprisingly, insurance carriers are balking at the idea of mandatory coverage.  It won’t surprise anyone if the rates are very high, but coverage still may be worth considering because, unlike other pests, the extent of any given bedbug infestation – and the damage it may cause, is unpredictable.

In the meantime, many landlords have stepped up pest inspections to stave off widespread infestations.  One particularly successful method of inspection is the use of a bug-sniffing dog that can point to the first sign of these loathsome pests so quick remediation can follow: fumigation along with steam-cleaning and hot-water laundry.  It also helps if tenants keep cuddly items like clothing off of floors, and wrap their storage items in plastic.

See Landlord Sued Over Bedbug Bites.

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  • Anne

    This is a very unfortunate thing for apartment owners etc. It could end up costing more than you make and in my case, I would not be able to make my loan payments. I hope we do not get an infestation or I will be out of business.

  • dan

    i hope that it can be insured in ohio and that it isn’t too expensive. i can see small landlords going out of business for this type of thing. if people think that walking away from residential homes because of upside-down loans is bad, let’s see what happens when the bank suddenly owns lots of small rental properties because the cost of getting rid of bedbugs is not worth owning the apartments…

  • Meloney Downing

    Pretty soon they will be making us landlords pay for our tenants to get rid of their lice. I mean when do the fees STOP for landlords. I wish these people would grow the hell up and take responsiblity for themselves. I am not their babysitters!!!!!

  • Leslie

    Most unfortunate for all…. but whose to say who brings the bedbugs into the home …..the new tenant?, the new tenant’s overnight guest?, the former tenant and their guests? playmates who visit? their own children or themselves who frequent theaters? service personnel? I have a rental home that has sat empty for a year and now I worry about renting it out knowing these pests can lie dormant for a year plus and while I believe my home to be pest free, I really don’t know for sure. And bedbug insurance? Why stop there? What about mosquitoes that possibly carry West Nile virus? Are landlords going to be held responsible for those pests, too should they find their way into a house whose doors have been left open? And then there are fleas and ticks that hitchhike on whoever passes their way…. all vectors carrying disease or discomfort, at the least. And let’s not forget our feathered friends who unfortunately carry mites, various flus, even tuberculosis! My point is…. where will the line of responsibility be drawn? These same problems can easily affect me in my home but because I own and do not rent, I have no one to blame/unload my problem onto. It would be my responsibility to rid my home of whatever problem comes my way. Why should it be any different for a tenant, provided a home is conveyed to same in a pest-free condition?

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