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Insurance



Another cost of landowner liability for third-party criminal acts is insurance. Because the landowners are sued on theories of negligence rather than for an intentional tort, they should be able to obtain insurance coverage for such lawsuits. This does not come cheap, however. According to Liability Consultants, Inc., the average settlement paid by insurance companies on behalf of landlords for crimes like rape and assault in the U.S. is more than $500,000 and the average jury award for cases that actually go to trial is $1.2 million. Landlords required to maintain insurance that adequately covers the risk of million dollar settlements will pass through the cost of that insurance to the tenants through increased rent. Of course, if the tenants cannot afford the increased rent, they will have to look elsewhere for housing, probably having to settle for an even worse neighborhood that has lower rents. The persons most harmed, then, are those on the lower rungs of the economic ladder, a consideration explicitly acknowledged in Miller v. Whitworth, 193 W. Va. 262, 267-68 (1995)) ("a shortage of low-income housing would ensue if landlords in high crime areas were burdened with a duty based merely on known criminal activity in the neighborhood").

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.