If you are the owner of an investment property and take on renters, you have to be prepared for the unexpected. Get landlord insurance to make sure you’re protected.
Most often identified as ‘Rented Property Insurance’, Landlord Insurance is specifically designed for those who own a property and rent it out to others – condo or apartment, full or partial house, for instance – to provide coverage for personal belongings as well as potential exposure to liability.
A great way to earn money, renting property is a popular investment for many. As such, it’s important for the owner to be properly insured with a policy that addresses the unique needs and requirements of rental properties in order to protect this source of income.
You may already know that some homeowner’s insurance covers renting out only a portion of the homeowner’s property. But did you know that this only applies, however, if the homeowner actually occupies part of the same home? If the property owner decides to rent out the entire house, a new policy – Rented Property, or Landlord Insurance – is required to be properly covered.
What is covered by Rented Property or Landlord Insurance?
Landlord Insurance covers several things depending on whether the property is a stratified condo or a detached home. Typical basic coverage will likely include:
- Rental Income
- Landlord Property (contents insurance)
- Landlord’s Liability
What kinds of Landlord Insurance are available?
When you talk to your insurance broker you will discover that there is a range of Landlord insurance policies available and each will provide for different degrees of associated risk. However, the coverage recommended will depend on the situation.
For instance, a single student renting a space short-term presents a different degree of potential risk than a family who rents a home for a longer span of time. Research has shown that short-term rentals tend to be riskier rental arrangements than those that are longer-term.
Landlords will look at a variety of criteria to determine what kind of risk is involved. These will often be a major deciding factor in which tenants they choose.
The most common types of Landlord Insurance are as follows:
Residential Rental Property (Rented Dwelling)
Developed to protect single or multiple-family dwellings – designed for long-term leases or per rental agreement basis.
Rented Condo Insurance
Another common kind of rented property insurance is Rented Condo Insurance – the homeowner owns a condo that he or she rents out. It’s a policy that is specifically created to bridge the gap left by the Strata Corporation’s insurance policy.
Rented Condo Insurance is often delivered on a case-by-case basis so that coverage is individually tailored to the risk in question.
Homesharing rentals: Airbnb, VRBO, etc.
Without doubt, home-sharing has taken off the world over. This popularity in home-sharing platforms has resulted in new and creative insurance instruments to deal with the demand. Be sure to ask your broker about the specifics of your situation.
Your agent will present the policy that best addresses your short-term rentals and the platform you’ll be using. This type of short-term rental homeowner’s insurance can also be used to protect those landlords who own remote properties, those who rent seasonally, and landlords who accept boarders into their own home.
Landlord Insurance Coverages
Case-by-case, most Landlord Insurance coverage is customized to meet the requirements of each different circumstance. But, there are some insurance options that help protect landlords from financial tragedy. These include:
- Structure coverage: This is liability protection for the actual structure or portion of the structure, you are renting out. You can also get associated structure coverage for garages, sheds, and other structures on your property.
- Vandalism protection: While it’s natural to want to trust your tenants, a smart, professional landlord will take into consideration every contingency. Vandalism protection will make sure that you are covered if you house a tenant who does not respect your property.
- Fair rental income protection: If your property becomes uninhabitable for any reason and your tenants are forced to vacate and you experience a loss of rent, you can still get paid your rental income up to a predetermined amount.
- Under construction coverage: Protects your property as it is being built, or while being renovated prior to allowing tenants.
- Condo liability protection: As a landlord, never rely on your condo association insurance to protect your investment. For example, any updates or improvements you make to your condo are not covered by the condo association policy if there is a fire or some other kind of damage. You will need to protect them yourself, and that is why you need comprehensive condo coverage.
- Theft coverage: If you rent out structures that include furniture and appliances, theft coverage is a smart choice in order to protect your property.
Do you have questions about properly protecting your investment or rental property? We can help – talk to us!