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Do I have to buy landlord insurance?
If you’re wondering whether you need to buy landlord insurance or if you can stick with a regular home insurance policy, the answer is pretty simple: most standard home insurance policies don’t cover rental activities, so you’ll probably need landlord insurance. That said, there are some cases where you may be able to stick with a regular home insurance policy — if you’re only renting out a room or suite in your home, for example. But if you’re renting out a separate property or a unit in a building where you don’t currently live, you’ll need landlord insurance.
How much third-party liability coverage should I get for my rental property?
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. You should also consider a higher third-party liability limit if there’s anything on your rental property that could increase the chances of someone getting hurt (e.g., a swimming pool). Bumping your liability limit to the next level may cost less than you think, so it’s worth pricing out a couple of different options.
Do my tenants need their own renters insurance?
Your landlord insurance doesn’t cover your tenants’ stuff. So, although tenant insurance isn’t mandatory in most provinces, it’s highly recommended. Your renters will need to purchase their own tenant insurance to cover their clothing, furniture, and everything else in case something happens. And, if they’re responsible for damage to your property their own liability coverage will help pay for it.
How much does landlord coverage cost?
The cost of a landlord policy depends on many different factors. These include the property’s location, how it’s heated, any previous claims you might have, and your personal information (your age, etc.), to name just a few. You might find that it’s slightly pricier than home insurance, since it’s riskier to own and run a rental property. You won’t be there to monitor it, and some renters may have less motivation to protect a rental unit from damage.
What other coverages might I need for my rental property?
Like homeowners insurance, additional coverages for earthquake, sewer backup, overland water and hail would need to be purchased separately. But, having these coverages can save a landlord from a lot of grief and financial stress. In recent years, for example, water damage has been on the rise. So consider reading up on how it happens, how to prevent it and how insurance against water damage can save you from a timely and expensive clean-up. And do the same with all other extra coverages available to you – you might just find you need them!
Will my landlord insurance cover short-term rentals?
It depends. Some insurers will allow short-term rentals as long as you’ve notified them first. Others will only permit it if you’re renting out a room or unit in the house you live in, or they might impose certain coverage restrictions. And some won’t allow it at all. Before you decide to use your income property for short-term rentals, be sure to speak with your insurer first.
At the end of the day, the main thing to remember is that as a landlord, you’re exposed to a lot more risk than you would be as a homeowner. Landlord insurance is a smart way to protect your investment.