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Do You Need Landlord Insurance?

If you are looking to make some extra money by renting out a property that you don’t live in, you must make sure that you have the proper insurance coverage as a landlord. Having landlord insurance can protect you from many risks and perils associated with housing tenants. 

Read on to find out more about landlord insurance and contact an insurance broker for more information. 

Why Do You Need Landlord Insurance?

The simple answer to why you need landlord insurance has to do with the risks and liabilities of having renters live on your property. Accidents happen all the time. Whether a tenant slips or falls while shovelling the sidewalk, or trips on a broken stair, you ought to have landlord insurance to mitigate certain financial risks and to protect yourself from any lawsuits. 

Landlord Insurance Coverage

So what does landlord insurance actually cover? Below is a general overview of the standard landlord insurance coverage which includes the following:

  • Property damage: you will not have to pay out-of-pocket for damages to your property if you are covered for property damage under your landlord insurance policy (e.g. fire, flood, etc.)

  • Liability insurance: as a landlord you could be sued if someone gets hurt on your property (e.g. slip and fall). With liability coverage, you can avoid paying for medical bills and legal costs out-of-pocket.

  • Landlord’s belongings: as landlord you are responsible for the upkeep of your property to ensure that it is generally well maintained. For example, if you have a lawnmower at your property for cutting the lawn and it gets stolen, you will be covered for the expenses as part of your landlord insurance coverage.  

  • Loss of rental income: if your property becomes uninhabitable for your tenants (e.g. due to an electrical fire) and they move out while you make the necessary repairs, you will be compensated for the loss of rental income as a result of an insured event. 

Importance Of Liability Coverage

Liability coverage is a standard when it comes to most landlord insurance policies offered in Canada. It is critical to protect yourself as a landlord from the immense out-of-pocket costs if you are found liable for events such as slip and falls, and other injuries on your property. 

There are two main types of liability coverage: property damage and bodily injury. 

  • Property damage: Your tenant purchased some expensive electronic equipment and a new TV.  The tenant (or delivery people) slipped on the ice, or tripped on an unrepaired step, breaking everything. Property damage coverage would help you cover these costs in such a situation.

  • Bodily injury: this coverage is intended to cover you if someone gets hurt on your property. For example, if you are cutting down a tree and it accidentally hurts someone on your property, bodily injury coverage can cover the legal expenses and medical bills that you would otherwise have to pay on your own.

How Much Does Landlord Insurance Cost?

The simple answer to this question is that it varies according to a number of factors. Some factors that insurance companies take into consideration when determining your landlord insurance premiums includ:

  • The location of your property. 

  • How your property is heated (e.g. electric, gas, wood, or oil).

  • A history of past claims. 

  • Other personal information, such as age etc. 

Compared to home insurance, landlord insurance simply costs more as the risk of owning and renting out a rental property is greater versus insuring your personal home. 

If you are considering renting out a property to tenants and have further questions about landlord insurance coverage options, contact us today so that we can help you meet your insurance needs.