It is ok to have your management companies as co-insured if you purchase insurance for your rental properties and handle all the payments, . Be very careful to purchase property insurance through your managers' Master insurance policy. Then you don't have the control of it. We just had a horrified experience with our former managers Ronald Weaver and Kimberly Weaver in Management Systems Residential in Detroit.
Our former managers have let our property insurance coverage under their master insurance policy lapse for 6 months due to non-payment while still deducting from our rents to pay for the insurance premiums, and exposed our properties and tenants to tremendous risks and liabilities. After we found it out directly from SWBC insurance company about the cancellation on Dec 30th, 2013, Ron Weaver blamed it was a middle agency’s fault.
After MSR reinstated our insurance under their master policy, we had a claim payout from SWBC sent directly to MSR for one vandalised property for a total of over $14,000 in March 2014. Ten months have already passed, we haven’t received a penny from MSR.
The insurance company normally sent the claim payout to the insurer under Master Policy, so it is up to the managers to pass the claimed funds to their clients. I reached out to SWBC for help, Ron Weaver even ignored their request to forward the funds to me. I had to take legal action and got court judgement against MSR to collect money. They ignored the court judgement and still didn't pay.
So it is wise not to use the managers master policy to purchase insurance at all.