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Landlord Insurance

Landlord Insurance

If you’re looking to make some extra money, you might be inspired to invest in your own income property. But before you sign the deed for your new rental property and put an ad out for tenants, you’ll want to make sure you have the right landlord insurance. It’s important to understand how your coverage will protect you, so we’re here to answer a few commonly asked questions about landlord insurance to help you prepare.

You’re probably wondering (as many do), “Why can’t I just go with a regular home policy?” Well, in some cases, you can. For instance, if you’re actually living in the home and renting out a room or a basement unit within your dwelling, you’re likely fine to go with regular home insurance. But if you’re renting out a separate property that you don’t live in, you’ll need to buy landlord insurance. Not only that – if you have a mortgage for your rental property, they’ll likely require you to have coverage as well.

Like a home policy, a landlord policy will help you repair or rebuild if your rented dwelling is damaged by wind, fire or another covered loss. Also covered? Any other structures on your property, like a shed or a fence. It also includes other important coverages that every landlord needs – don’t worry, we’ll get to those below!

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Rental Income

Landlord insurance can include coverage for loss of rental income in case your tenants have to move out following an insured event such as a fire. This coverage is typically cheap to purchase, and it will often include time and coverage limits.

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Landlord Contents

Unless specifically stated on the insurance policy, there is no coverage for the landlords contents. Contents could include items such as major appliances or furniture that you’ve included in the rental unit.

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Tenant Insurance

Your insurance policy will protect your property, but it won’t protect your tenants or their contents. If one of your tenants is responsible for an injury, the landlord could be on the hook. Consider recommending that your tenants have their own insurance.

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Liability Coverage

You’ll most likely want to have more third-party liability coverage for your rental property than you would for your own home. You can’t control your tenants or their guests, and if something were to go wrong on your property, you could face a hefty lawsuit.

Landlord Insurance FAQs

Does my homeowner's policy cover my rental property?

If you’re renting out a separate property, you’ll need a landlord policy.

I rent out a portion of my home from time to time. Am I covered?

This varies between each insurance company, so it is important to review your policy wordings or discuss this with your HMS broker.

If you’re renting out a property separate from your home a Landlord Policy will make sure you’re covered if there’s any damage to items that belong to you and the property. Things like major appliances, fixtures or tools (a lawn mower or snow shovel are a couple of examples). 

Are my tenants covered by landlord insurance?

Your landlord insurance doesn’t cover your tenants’ stuff. Renters need to buy their own tenant (or renters) policy to cover their clothes, furniture and everything else they own in case something happens.

Although renters insurance isn’t required by law, it’s highly recommended. Why? Well, because it has benefits for both you as a landlord and your tenants. It provides peace of mind for tenants by repairing or replacing their things if they’re lost or damaged in a fire, flood or another covered event. If something happens to your rental property and your tenants can’t live in it, their renters policy will pay for a place for them to stay until they can move back in or find another place to live. And, it protects your rental property too, as renters liability will help cover costs if a tenant damages your property.

What do Landlord contents include?

Landlord belongings include your items that are kept in the property, such as furnishings. Even if you rent out your property as “unfurnished” this coverage is still required, as it includes landscaping equipment, maintenance equipment and household appliances (e.g. fridge, washer, oven).

I plan to do a renovation before the tenants move in, is that fine?

Renovations are a tough subject with insurance companies, and underwriting requirements will be different from each company. When buildings are undergoing renovations and are vacant/unoccupied there is a greater chance for losses such as fires, vandalism and water leaks. It’s important to review these renovations with your HMS broker to make there won’t be any coverage breaches or gaps.

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