Home Insurance for Rental Property: All You Need to Know
Have you recently purchased or inherited a secondary property? Are you looking for a simple and effective way to generate some passive income? Then you may want to consider turning your secondary property into a rental property.
With home prices at an all-time high, more and more Canadians have started turning to rental spaces for their living accommodations. This gives property owners the ability to leverage their assets and generate a hefty amount of income with minimal effort.
However, like any other living space, you need to invest in quality property insurance if you want to financially protect yourself from unexpected risks. Want to learn more about the ins and outs of getting insurance on rental property in Canada? You've come to the right place.
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What type of insurance do you need for a rental property?
The type of insurance that you need for your rental property will depend on the context of the living situation within the property.
For instance, are you planning on living in a portion of the property or is the home separate from your living space?
If you're planning on living in a portion of the property, like a loft or basement, you may be able to use a standard home insurance policy. In this case, you would purchase a home insurance policy for the building and the contents in your unit, and then an additional rider or endorsement could be added to cover the extra liability of the 2nd unit in the home. We suggest contacting your insurance provider to confirm that your policy allows you to do this.
On the other hand, if you plan on renting out a separate property and do not intend to live in it, then you cannot rely on homeowners rental insurance.
Instead, you should speak to your insurance provider or Surex insurance advisor about getting landlord insurance.
What is landlord insurance for rental property in Ontario?
Landlord insurance is a specific type of property insurance that financially protects rental property owners from a wide range of risks and perils.
Landlord insurance is relatively similar to standard home insurance, but there are a few minor differences between them.
One of the primary differences between standard home insurance and landlord insurance on rental property is the price. In most cases, landlord insurance is 25% more expensive than traditional property insurance. These are a few things that you should keep in mind while comparing insurance quotes for your rental property.
What's covered by landlord insurance for rental property in Ontario?
Here's a quick list of the types of coverage that are generally included in landlord insurance policies:
Liability coverage
Liability coverage financially protects rental property owners from legal and medical expenses resulting from third-party injuries that take place in or on your rental property due to negligence on your part.
For example, if a tenant's guest get injured because of something the tenant does to them, ie: fist fight, etc, then the landlord's insurance wouldn't respond. But, if a tenant's guest gets injured because they slip and fall on a broken step, then the landlord would be liable.
Property coverage
Property coverage financially protects rental property owners from damage to the living space and structures located on the property. The damage needs to be the result of a covered loss.
Lost rental income coverage
Lost rental income coverage protects rental property owners by covering lost rental income that results from a covered loss, like a fire or burst pipe.
Personal belongings coverage
Personal belongings coverage covers the cost of the landlord's personal belongings if they are damaged by the tenant or an insured peril. This type of coverage does not cover the tenant's expenses if their personal property is damaged.
Why should you get landlord insurance for your rental property?
Simply put, you should get landlord insurance for your rental property because it's the best tool that you can use to financially protect your rental property from unforeseen damage.
For example, if someone accidentally trips on a broken set of stairs on your property and sues you for negligence, then the liability portion of your landlord insurance policy will cover all or a portion of the legal expenses (depending on your coverage limits). If you don't have the right type of coverage for your rental property, you will have to cover all of the legal and medical expenses by yourself.
That's why you should get insurance on your rental property in Canada — you never know when something might happen!
What type of insurance should you get if you're renting a property?
Whether you're renting a home, apartment or condo unit, you should consider protecting yourself with tenant insurance.
Tenant insurance is an undeniably invaluable tool for renters that want to protect themselves and their belongings from unexpected risks and perils.
Although tenant insurance isn't legally required in Canada, your landlord may ask you to invest in a policy before moving into the rental unit. So even though it isn't required by law, you may need to invest in a policy.
Bonus — Want to get the inside scoop on tenant insurance? Click here to learn more.
Where can you get quotes for landlord insurance on rental property?
Whether you need landlord insurance or home insurance for a rental property in Ontario, the first thing that you should do is contact an online insurance brokerage, like Surex.
Online insurance brokerages are groups of insurance experts that work with insurance companies and policyholders. Policyholders can use online brokerages to find and compare several insurance quotes at once.
Contact your Surex insurance advisor today to compare quotes and start saving on insurance!
Save up to 25% when you bundle your insurance policies with Surex
At Surex, we want to make it easier for policyholders like you to find the best insurance at the lowest possible rate. We do this by helping you find and compare quotes from the best insurance providers in the country.
Want to get started? Contact us today, and you can start comparing quotes in ten minutes or less! While you're comparing quotes with your advisor, don't forget to ask about the benefits of bundling multiple policies. Bundling multiple policies can help you get access to incredible savings, sometimes as high as 25%.
