Renting and Insurance – Why Landlords Need An Effective Rental Property Insurance Policy
Owning a rental property is a great opportunity to earn some extra income. However, it is not as simple as renting a room or a unit and collecting rent at the end of the month. There is a lot more to it, especially from a home insurance perspective.
As a landlord, you need to be familiar with your rights and responsibilities. You need to take the necessary steps to protect your investment in your rental unit, in the form of a good insurance policy to cover you if damage is caused to your property. Even if you are renting a room to a friend, you still need to notify your insurance company to ensure you have the proper coverage in place.
There is no shortage of situations that are a potential risk to your rental property. From standard threats such as fire, water damage, theft and other natural disasters, to rental property specific risks such as property damage caused by tenants. And, this doesn’t take into account other risk associated with investments, property maintenance, and other expenses.
Learn more by reading 5 Rental Tips for Homeowners with Income Suites
What Does Landlords Rental Property Insurance Cover?
Here is an overview of what is covered as part of a landlord’s rental property insurance policy:
- The rental building
- Private structures on your property such as your garage or shed
- Any personal property of the landlord that is stored onsite
- Property or items that are supplied by the landlord for tenant use (appliances, furniture, etc.)
- It can cover your defence costs if you have a legal dispute with a tenant
- It can cover lost rental income from a tenant being require to vacate the unit as a result of damage from an insured loss
What If I Don’t Have The Right Insurance Coverage?
Plain and simple – you are putting yourself at risk.
- You risk being liable for damage to your tenants belongings if you are found liable for property damage
- Failure to provide full disclosure could result in your claims being denied and you insurance policy being cancelled
- If you experience regular tenant turnover, you are exposed to many forms of insurable risk
Renters and Tenant Insurance
It is becoming increasingly common for landlords, especially in condo and apartment buildings, to require that tenants have proof of renters insurance as part of the rental application. This ensures that if anything happens to your rental property, regardless of who is at fault, that your tenant will also be covered by their insurance company. This is something you should consider when taking applications for your rental.
As with any form of insurance, it’s important that you take the time to get an insurance quote to weigh your options. This will help you get the best coverage and policy for your rental.
Are you a landlord? What advice can you offer to others that are shopping for a landlord rental property insurance policy?