Landlord Insurance for Canadian Home-owners
Landlord insurance for Canadian home-owners who rent out their property is essential if you want to be covered by every possible eventuality. Ordinary home insurance does not cover many of the things that can arise when dealing with a tenant. Most of the time everything will run smoothly, but when it doesn’t, your landlord insurance policy is there to cover you and provide peace of mind.
The two biggest risks facing landlords are: intentional or malicious damage to the property by a tenant and the non-payment of rent. Insurance policies covering home buildings and contents do not normally cover these risks.
The typical features that a landlord insurance policy covers that differ from an ordinary home buildings and content insurance include:
- damage to the property caused maliciously or intentionally by the tenant, or guests of the tenant
- theft of any part of the property by the tenant or guests of the tenant
- general liability, including any claim made against you by the tenant
- any legal expenses you incur as a result of having to take action against the tenant
- the loss of rental income if a tenant fails to pay the rent at the agreed time
Landlord insurance for Canadian home-owners is not always the same. The policies can differ considerably from landlord to landlord, depending on what is required. For example, if you are renting out a fully furnished property, it may be possible to take out a landlord insurance policy which covers contents as well, negating the inconvenience of requiring a separate policy.
Some other types of landlord insurance policies are designed to be taken out as an additional level of cover to a standard home and contents policy. If you are renting out a property that is unfurnished, it is usually possible to take out a landlord insurance policy that covers just the building and its fixtures and fittings. The tenant will then be responsible for insuring any furniture and personal belongings he or she brings into the building.
It is true in a general sense that the more you cut corners with landlord insurance, the more likely it is that it will come back to haunt you, sooner or later. Emergency cover is one good example. Suppose a water pipe bursts, or an electrical fire starts in your property. Your tenant will want to have things back to normal as quickly as possible. If you have to arrange for plumbers, electricians, etc, to come and fix the damage every time it happens, it will be very inefficient and will not keep your tenant happy.
If, on the other hand, you have comprehensive emergency cover as part of your landlord insurance policy, the insurance company will deal with the emergency, should it happen. Repairs or replacement will happen quickly and efficiently, and it will probably cost you a lot less in the long run. Your tenant is also likely to have a much better experience.
Landlord insurance is something that should not be rushed in to. You should set aside time to consider exactly what you need insurance cover for. Try to think of every possible eventuality, and get expert advice too if you can. In general terms, the more comprehensive your landlord insurance is, the fewer problems with the building, its contents and your tenant, you are likely to face later.