Protect Your Rental Property With the Right Coverage
Before you hand over the keys to your income property, protect your investment with landlord insurance.
If you rely on monthly rental income from your tenants, landlord insurance provides you with the financial protection that standard homeowners insurance alone won’t.
If your rental unit becomes uninhabitable due to a fire, for example, it can take months before the restoration is completed and the tenants move back in.
Protection from lawsuits is also wise as a landlord, as you could be held responsible for accidents or mishaps tenants have on your property.
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Scott was really helpful in setting me up with a plan, which presented some difficulties. I rent my house and companies that offer landlord insurance are limited. I also just had a flood claim, thus it was not easy to find something reasonable. I tried a couple of other brokers first who did not help at all. Lots of back and forth voicemails, forms, etc. - ultimately without finding a reasonable rate. Scott found a great rate right away and the process was very easy. He was also very professional. I’m very glad I called!
03 Jul 2018
What Does Landlord Insurance Cover?
What are you getting when you pay for landlord insurance? Most landlord insurance policies are customized to meet the needs of the client, but there are some common coverage options that help to protect landlords from financial disaster.
Structure coverage – This is the liability protection for the actual structure, or portion of the structure, you are renting out. You can also get associated structure coverage for garages, sheds, and other structures on your property.
Fair rental income protection – If your property becomes uninhabitable for any reason and your tenants are forced to vacate, then you can still get paid your rental income up to a predetermined level.
Available as a stand-alone policy, whichever insurer already provides you with your basic landlord insurance.
Theft coverage – If you rent out structures that include furniture and appliances, then you should get theft coverage to protect your property.
Unpaid rent – Unpaid rent, either because of a tenant’s death, property that cannot be occupied, or defaulting tenants
Vandalism protection – You want to trust your tenants, but smart business professionals protect themselves from every contingency. Vandalism protection will make sure that you are covered in the event that you get a tenant who does not respect your property.
Most insurance companies won’t insure your rental property if your tenants don’t have their own tenants insurance.
Doesn’t My Homeowner’s Insurance Cover My Rental Property?
It is possible that your existing homeowner’s property insurance will allow you to purchase a rental endorsement, depending on who is renting your property. Most insurance companies require that one family only is occupying the rented dwelling. Other combinations of tenants such as a number of unrelated students can also be acceptable under certain conditions but should be discussed with an insurance professional. The downside of covering your rental property under your own homeowner’s policy is if a claim should be made regarding the rental property, this could negatively affect your homeowner’s insurance rates and availability.
Get the Landlord Insurance that Works For You
The number of tenants you rent to and type of rental properties you own will determine your exposure to risk and your coverage requirements.
For example, a family renting a home is considered a different type of risk than a student renting a room for the school year. Short-term leases are often considered riskier than long-term, and your screening method can play a role in how your landlord policy is written.
Residential Rental Property Insurance – Protects single or multiple-family dwellings, normally for long-term rental. Discounts are often available from insurance companies to landlords who require tenants to have renters insurance.
Apartment Building Coverage – Residential property coverage usually applies to units that are one to six family dwellings. Apartment building coverage is offered to any complex or building that houses seven or more families.
Rented Condo Insurance – When you own a condo that you rent to tenants, you need insurance to help fill in the gaps that the condo association insurance leaves behind. This is a type of landlord insurance that is done on a case-by-case basis to make sure the coverage is just right.
Student Rental Unit Insurance – If you rent rooms to students, then you need insurance to protect your investment. The rules you make regarding residency in your building have a significant effect on your insurance rates.
AirBnB Rentals – Offering short-term rental properties through the AirBnB app can be a great way to make extra money, but it can become costly if you don’t have the right insurance. It takes a special type of insurance to adequately protect your property in this very unique situation. This type of insurance can also be used to protect landlords who own properties out-of-town, landlords who take boarders in their own homes, and people who rent out seasonal properties.
Taking on tenants increases your risk for financial loss, and you need the right insurance to offset that risk. Be sure to discuss your specific needs with your broker to make sure that you get the insurance that fits your specific situation.
Protect your Ontario rental property with landlord insurance.
Contact a Mitchell & Whale home coverage expert to get a quote on landlord insurance coverage in Ontario: Speak with a broker today: 1-800-731-2228
Do Your Tenants a Favour
Your landlord insurance does not cover the possessions and belongings of your tenants or provide them with liability coverage, so it would be good advice to suggest they consider tenant’s insurance. If their furniture, clothes, TVs, computers and other belongings are ruined by fire or water damage they caused or another uninsured tenant caused, your insurance does not cover them. When your tenants start adding up the value of their possessions, they might want to look into getting their own renter’s insurance.
Learn more about what's covered by home insurance in Ontario.
Frequently Asked Questions
Why get landlord insurance?
Because your regular property/homeowners insurance won’t cover you if you suffer a loss and it’s determined that you were renting out the space. Landlord insurance is essential, whether you are a commercial landlord renting out multiple properties, or a homeowner renting out your basement. It covers you for the increased risk associated with having tenants.
What does landlord insurance cover?
Landlord insurance typically covers the building or portion of the property that you are renting, from fire, water and wind damage just like a homeowners policy. It also will replace lost rental income if you are unable to rent the space due to an insured loss. It’s also a good idea buy additional coverage to protect you if your tenants default on their rent, vandalize the space or steal your property (if you provide furniture, appliances etc.). Note that AirBnB rentals require a special policy, and are not covered by a typical landlord policy.
What's not covered by landlord insurance?
A standard landlord policy doesn’t cover you for theft of belongings or vandalism of the property. It also doesn’t cover you if your tenant fails to pay the rent. You can now buy extra coverage for these things. You will also need special coverage if you want to rent short term (AirBnB). This coverage is quite a bit more expensive.
How much does landlord insurance cost in Ontario?
In Ontario, residential landlord premiums average around $900/year for a house and $400/year for a condo/apartment. Expect to pay about 20% more than you would if you were occupying the space yourself. The premium for a commercial landlord policy depends on the size of the space and what it’s being used for.
If you are renting out commercial property, the premiums will based on the size of the space, and what the property is being used for.
How much is landlord insurance for a condo?
For a condo or apartment in Ontario, premiums average around $400/year. The premium for a condo landlord policy is usually about 15-20% more than the homeowners premium if you were occupying the space yourself. Because the physical structure of a condo is insured by the condo corporation, premiums are much lower than they would be for a house.
Can I claim landlord insurance on tax?
Yes. You can deduct your landlord insurance premiums from your rental income when you do your taxes.
Which landlord insurance is the best?
The premium for a landlord policy depends on the property you are renting and a number of other factors. Expect to pay about 20% more than you would if you were occupying the space yourself. For an apartment in Ontario, premiums start around $800/year. Commercial properties are even more complex to price, depending on the size of the space and what it’s being used for.
When should I get landlord insurance?
As soon as possible. If something bad happens, your claim could be denied if you didn’t let your insurer know that you were renting the property.
What’s the difference between home insurance and landlord insurance?
There are two main differences between home insurance and landlord insurance. First, landlord insurance is about 20% more expensive, because of the additional risk of someone else having possession of your property. Also, landlord policies usually don’t cover theft or vandalism.
Can I require my tenants to have renters insurance?
Yes. You can stipulate in the standard lease agreement that the tenant needs to have insurance. In fact, your insurer will probably insist.
How much renters insurance should a landlord require?
From a residential landlord’s perspective, you are concerned with making sure your tenants have at least $1 million in liability coverage, which is standard with a tenants policy.
If you have any questions or would like a no obligation landlord insurance quote, please call Mitchell & Whale Insurance Brokers at 1-800-731-2228 or email us at firstname.lastname@example.org. We’d be happy to help!
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About Mitchell & Whale
Mitchell & Whale Insurance Brokers is a family-run business since 1948, now operated by Adam Mitchell, the third generation in the business. Clients are considered part of the family too. In fact, over 90% of our clients stay with us year after year, thanks to the trust they have in our insurance experts.