What is Landlord or Rental Property Insurance and What it Covers?

A Landlord's Guide to Rental Property Insurance

Your homeowner insurance does not protect what Rental Property Insurance or landlord insurance can cover. 

The insurance for rental property is a comprehensive coverage option to protect your property from damage and more when it’s rented. 

Why do landlords need commercial rental property insurance? What does it covers? What’s the difference between rental property insurance, homeowner’s insurance and renter’s insurance? Our comprehensive guide has got you covered.

If you are wondering what type of insurance  suits your needs and how it can protect you, keep reading to find the best coverage options for you.

What is Rental Property Insurance or Landlord Insurance?

Rental property insurance or landlord insurance protects your rented home or building if it gets damaged by a covered loss. It is further divided into two coverage options: liability and property protection. Both these options protect the landlords from potential financial loss.

Rental property insurance or landlord insurance protects your rented home or building if it gets damaged by a covered loss. It is further divided into two coverage options: liability and property protection. Both these options protect the landlords from potential financial loss.

All types of commercial rental property can get covered in landlord insurance, including:

  • Uninhabited home rented to a tenant 
  • Commercial rental property 
  • Seasonal rental property for vacation 

What is Covered in Rental Property Insurance?

Landlord insurance for rental property includes the following coverage options:

Dwelling Coverage

Similar to homeowners insurance or personal property insurance, this coverage option covers any damage done to the dwelling. However, it can cover limited types of damages. We recommend you to double check your landlord insurance coverage policy to understand what it covers and what it doesn’t. 

Liability Coverage

If a tenant or visitor falls or gets injured within the premises of a rental property, they can sue the owner to pay for the medical bills or damages done. That’s where liability protection comes in.

Rental Income Coverage

In the one-off event of rental property damage that made the property uninhabitable, you can get covered for the financial loss while the building gets repaired.

Personal Property Coverage

With rental property coverage, you have your belongings covered such as appliances, lawn mowers, and other home furnishings you have left at your property. If your personal property gets damaged or destroyed, you will get covered for replacement or damages. However, it does not cover the personal property of the renters. 

Optional Coverage

Mostly, the regular landlord insurance for rental house does not cover damage done by earthquakes, floods or cyclones. It’s important to upgrade your insurance on rental property in Canada according to where you are located. Check your insurance coverage terms and purchase specialty insurance to stay protected against natural disasters. 

Umbrella Coverage

For landlords with multiple rental properties, the umbrella policy gets them all covered under one insurance. Most landlord insurance policies cover liabilities worth a limited amount. With the umbrella coverage, you can have all your properties protected under one insurance. 

What’s Not Covered In Landlord Rental Insurance?

Although landlord insurance provides comprehensive coverage options, you cannot make a claim in some cases.

1. Appliance or equipment breakdown

Rental house insurance does not cover the repair costs of electronic appliances, cooking range, furnace, geyser or heater. You can purchase additional rental property home warranty to get these items covered.

2. Tenants possessions

In case of a burglary or damage done by a natural disaster, landlord insurance policy does not cover tenants possessions. Based on state laws about landlord-tenant insurance, a landlord may have to ask the tenant to get renters insurance before giving the property on lease. The renters insurance protects damage to tenants personal belongings.

3. Sharing personal property

If you rent out a portion or a room of your personal home, you cannot get landlord insurance. The rental property needs not be occupied by the homeowners to get insurance. You can talk to your insurance provider to know what alternative options are there for you.

Why You Should Must Get Rental Insurance In Canada?

According to the Royal LePage survey, more than one in every ten Canadians are owners of multiple homes, where most of them are used for earning rental income. 

However, renting your property without insurance is a risky feat, especially if it’s fully furnished. That’s where rental property insurance can get you covered.

Besides that, although landlords are not legally bound to get landlord insurance, most mortgage lenders demand it. The rental insurance for landlords is a protection from financial loss due to damage to property and of the owner in cases of personal injury to the tenants.

Landlord Insurance vs Homeowners Insurance: What’s the Difference?

The homeowners insurance protects the home and family of a landlord where he lives. It covers any damages done to his home or possessions due to natural disaster, robbery, etc.

Whereas, the landlord insurance protects your rental property and covers the tenant-related damages.

Moreover, there is a huge difference in the cost of homeowners insurance and landlord insurance.

Landlord Insurance vs Renters Insurance: What’s the Difference?

The landlord insurance or rental property insurance is completely different from renters insurance. The former covers the damages done to the landlord’s rented property and his possessions. The latter’s protects the tenant’s possession in case of damage caused by natural disaster, robbery, and more.

How Much Liability Insurance Do I Need for Rental Property?

Most landlord insurance policies have a minimum of $100,000 to $300,000 coverage cost for small properties. However, the total liability cost is determined based on the amount of rental property you own, your mortgage status and your total net worth. 

Therefore, you need to get the Rental House Insurance Quotes from a professional and transparent insurance agency. As the total insurance cost is already huge, it’s important to have a trusted insurance broker to back you up.

Choice is committed to providing insurance solutions with complete transparency that no other broker offers in Canada. Get yourself a Free Quote Now before you make your decision.

Summing Up

Renting your property, especially if it’s a furnished spot, involves great risks. With rental property insurance, a landlord is protected from major financial loss in events of misfortune.