What is Rental Property Insurance?
As a rental property owner, you want to ensure that both your property and your investment are protected, no matter what happens. Rental property insurance offers more than a standard home insurance policy – rental insurance is designed specifically for landlords and income property owners, and offers them the protection they need to keep their investment secure.
What Does Rental Property Insurance Cover?
As a landlord, you assume greater risks than typical homeowners, and therefore you need an insurance policy that offers extra coverage. Your landlord home insurance policy can include coverage for:
- Damage to your rental property or personal possessions as a result of vandalism or natural disaster
- Damage to your property or possessions caused by your tenants
- Theft of your personal possessions from the rental property
- Loss of rental income due to unexpected repairs arising from a covered event
- Legal liability coverage in case a tenant is injured on your rental property
Note that rental property insurance does not cover your tenants’ personal belongings or offer personal liability protection for tenants. For this reason, it’s recommended that landlords consider requiring their tenants to purchase their own tenant insurance policy before signing a lease agreement.
Do I Need Rental Property Insurance?
If you plan on renting out your main dwelling on an occasional basis – say for a week or two every year – then you may be able to extend your homeowners insurance policy to cover this activity. If, however, you rent out your main property or secondary dwelling on a regular basis, then you will need to purchase a separate rental property insurance policy. This covers you for events associated with renting property to long-term tenants on a regular basis. At the same time, if you are planning to rent out a property you own as a vacation rental, bed and breakfast, or other type of short term rental, you may need to purchase business insurance instead. If you’re not sure which type of insurance is right for you, feel free to talk to one of our insurance brokers today.
Tips from First Foundation
If you already have homeowner’s insurance, you may be able to get a better rate on rented property insurance by purchasing additional coverage from the same provider. It may also be a good idea to consider purchasing the maximum amount of liability insurance coverage, since as a landlord you are assuming a larger liability risk than the average homeowner.
Of course, it’s always a good idea to compare landlord insurance quotes before purchasing a policy. At First Foundation, we work directly with some of Canada’s best insurance providers, which allows us to find you the best rental insurance quotes for any type of rental or income generating property. Let's talk!