Investing in real estate is a popular means for Canadians to supplement their income, but this presents a sizable risk.

  • What happens if your tenant damages the property?
  • Who takes care of liability losses in the event that someone slips and falls on the property?
  • What happens if a nearby lake or water bodies overflow and damage your dwelling?

These are just a few of the questions that may be on your mind as a potential landlord; this page will help you better understand Rental Property Insurance so you can ensure you are properly protected financially. Whether you are considering a short-term rental, student rental, or standard rental, our team at Insurepedia can help you find the right protection for your assets so you can safeguard your investments

What’s the difference between a Homeowners’&Rental Property Insurance policy?

This is a common question for property owners. While your Homeowner’s policy may allow for the provisioning of rented basements or a single room, your standard home insurance policy may not cover investment properties where you don’t live in the same premises. These properties - known as standalone rentals - require separate Rental Property Insurance Policy with its own coverage limits.

A standalone Rental Property Insurance Policy has most of the coverages that a homeowner’s policy would have, along with rental income coverage. This coverage option would reimburse you for lost rental income in the event that your tenant needs to vacate the premises because of an insured loss.

What exactly does a Rental Property Insurance Policy cover?

Like a homeowner’s policy, a Rental Property Insurance Policy covers a wide range of defined perils including:

  • Theft & Vandalism
  • Fire
  • Hail & Windstorm
  • Falling objects
  • Explosion
  • Aircraft or vehicle impact

A Rental Property Insurance Policy will cover the structural aspects of the building - such as the dwelling itself including walls, floors, fixtures - as well as any furniture and appliances if you have furnished the rental property. Keep in mind that your Rental Property Insurance Policy does not cover contents or belongings of your tenants, so make sure that your tenant’s have their own Tenant’s Insurance policy in place in order to protect their personal belongings.

What kinds of dwellings does Rental Property Insurance cover?

Whether you have a condo unit, a standard dwelling, or a student rental, there are various types of Landlord Insurance or Rental Property Insurance Packages available depending on the risk. Here are some of the policies that are available to investment property owners:

  • Standard residential rental property: this kind of policy covers a one-to-two family home where the tenants are long-term renters (minimum 1 year lease agreement).
  • Apartment and condominium units: these policies cover your unit’s structure and any furnishings. A condominium owner’s policy is particularly essential for filling in any coverage gaps left by the condo unit corporation’s policy
  • Student rental insurance: having multiple unrelated tenants increases the riskiness of the investment and has resulting effects on your insurance premium. It is important to discuss with your broker on setting up a policy that would cover your exposures sufficiently for such an investment.
  • AirBnB and short-term rentals: short-term rentals are a great way of making some side revenue, but expose you to a greater financial risk when considering liability exposures. Short-term rental insurance is a uniquely designed product that would sufficiently protect your property.

What impacts the premium?

As with homeowner’s insurance and tenant’s insurance, a Rental Property Insurance Policy premium is affected by the details of the dwelling (ie. age, square footage, number of bedrooms and bathrooms, neighborhood), your prior insurance and claims history, and the coverages chosen. The unique rating factor to landlord’s insurance is the nature of the lease - standard one year rental, student rental, short term rental - and the number of occupants

As a general guideline, dwellings with shorter rental durations and more occupants have higher premiums than standard one year rental investments because of the liability concerns in renting out the household to various unrelated individuals. However, it is important to discuss your Rental Property Insurance needs with your broker so that he can set up a policy that is best suited to your requirements and does not expose you to shortfalls in the event of a loss.

How do I set up a landlord’s insurance policy?

Buying a rental property is already has a risk exposure, don’t let the insurance process add to the stress! At Insurepedia, our licensed broker would be happy to help you by setting up a comprehensive Rental Property Insurance Policy suitable for your investment. We work with various insurance companies and have a track record of helping to obtain insurance for even the most complicated of risks. Your peace of mind is just a phone call away!

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