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.
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!
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.
Available as a stand-alone policy, whichever insurer already provides you with your basic landlord insurance.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Yes. You can deduct your landlord insurance premiums from your rental income when you do your taxes.
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.
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.
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.
Yes. You can stipulate in the standard lease agreement that the tenant needs to have insurance. In fact, your insurer will probably insist.
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!