Landlords have a lot of responsibilities when it comes to renting out their property. Many individuals invest in a second resident which they rent out for extra income. This can be profitable, but it comes with some extra expenses like home insurance for landlords.
Understanding Landlord Insurance
Landlords that are new to renting can get confused as to what their landlord insurance will cover. Some are under the misconception that their property insurance will cover damage done by the tenants themselves. In most cases this is not true.
What Will Landlord’s Insurance Cover?
First, it has to be determined what type of landlord insurance is needed. There are different categories of landlords such as;
- Residential property landlords
- Apartment Building landlords
- Condo landlords
- Student Landlords
- Airbnb landlords
Each of these categories is going to require the landlord to have a specific type of insurance.
Home Insurance for Landlords
In this case the insurance applied for is for a single dwelling like a second residence. Or perhaps a duplex which is suitable for multi-family living. The standard home insurance for landlords is going to provide the following types of insurance protection;
- The structure of the rental home
- Additional buildings attached to the rental home
- Other buildings that are part of the rental property that are detached
Then as with most types of insurance there are additional add-ons that can be bought for extra coverage such as;
- Protection for water damage
- Appliance coverage
- Rental Income
Each Insurance Company is Different
While all the insurance companies that offer landlords insurance will offer the same basics, there will be variances. Some will offer more coverage options for the basics. Others will offer different types of add-ons.
Why You Need Landlord Insurance
If you have personal home insurance, you can understand why you would need to have landlord’s insurance. It is important to first consider the more important aspects of the insurance coverage.
Property damage can take place through many different causes such as:
Acts of nature:
This can occur from storms which can cause damage from windstorms, lightning and hail.
Can be caused by acts of nature or can be caused from something going wrong in the home. Such as;
- Pipes bursting
- Sinks overflowing
Fire can be caused as a result of a tenant. Or, it can be caused by wiring. There can be several different causes of the fire. Landlords need as much insurance protection as possible to cover this type of event.
For the tenant’s contents, they are responsible for their own personal items. Sometimes landlords will rent a house furnished. Or there are items provided with the rental home. Such as appliances and various types of fixtures. These belong to the landlord, therefore, need to have insurance coverage.
Third Party Liability:
This is another important segment of the landlord’s insurance coverage. There have been situations where tenants have become injured on the property and put the blame on the landlord for this. Landlord’s need third-party liability coverage to protect them against lawsuits like this.
When a landlord is renting out property, they have no control as to who may be visiting there. Nor, do they have control over the many different forms of liabilities that can occur. Landlords have the responsibility of making sure their property is maintained and safe. But, different circumstances can arise where something gets overlooked. Or, the landlord believes the tenant is responsible.
In one particular case, a tenant sued their landlord over an injury that resulted because of a worn carpet. There are different acts that protect both the tenants and the landlords. With so many possibilities of mishaps when renting having good liability insurance is important.
Stand Alone Rental Property Insurance
Some individuals refer to landlord’s insurance as standalone rental property insurance.
When Can a Landlord Buy Landlord’s Insurance?
There are many different Insurance Companies that cater to the different provinces in Canada. Some of which also offer landlord’s insurance. There are some who have made suggestions of Insurance companies that offer this such as;
- North Blenheim Mutual Insurance
- Co-Operators Insurance
- Humberview Insurance
- Square One Insurance
Some provinces have landlord organizations. Some of these offer the chance to buy landlord’s insurance through an insurance company that they have affiliated with. By doing this, the landlord may get better rates.
Another option for those that want to buy landlord’s insurance is to obtain online quotes. This will help to narrow down the choices. Quotes will be given according to the information you provide. From there you can research further what those Insurance companies have to offer.
When buying your landlord’s insurance you want to know what the deductibles are. This way it helps you to determine in the future if a mishap occurs whether it is worth putting in a claim for.
Know What You Are Being Covered For
When reviewing a landlord insurance product take the time to know exactly what it is going to cover. Keeping in mind when you obtain quotes that every insurance company is different. You need to know what the quote is covering. Then also ask if there are any add-ons that can be purchased from the company. This way you can decide if the basic policy is going to be enough. Or, if you feel that you want to pay for some of the extras. Every landlord has their own unique needs when it comes to the type of insurance they require.
Some insurance companies may insist that your tenants have their insurance. They may want proof of this. But, this can be difficult as tenants cannot be made to obtain insurance. Even though it may be written into the lease agreement. The only way around this is to make sure the tenants have paid for their tenant insurance before they move in.