Do you own rental property? If you do, then you must have thought about what would happen if a fired razed down the property. Insurance helps protect you against unforeseen dangers and disasters that could wipe out your investment in one fell swoop. Without a doubt, house insurance for rental property is an important consideration for any serious investor. Before you invest in those Toronto condos you’ve been eyeing, here are some of the policies you need to discuss with your insurer.
- Property Protection
Policies meant for rental property are meant to provide coverage for damage to the property by lighting, fire, wind, ice, hail and other similar incidents. Standard policies for landlords do not provide coverage for flood damage. For this, you will be forced to take out a separate policy.
It is worth noting that insurance providers refer to property protection as dwelling coverage.
- Personal Property Protection
Such a policy will provide coverage for your personal property left on site for tenant use or maintenance. This includes items such as lawnmowers and appliances. Such a policy will not cover tenant property so you should inform your tenants to get their own renter’s policy that will cover damage to their personal property. This will prevent confrontation and disputes about who covers the cost of damaged tenant property.
- Liability Protection
Liability coverage is often included in landlord policies. This helps meet any medical expenses and legal fees incurred as a result of a tenant or guest getting injured on the property.
- Rent Loss Protection
There is a chance that your property could be damaged as a result of a disaster such as a fire. This could easily render it uninhabitable and result in loss of rental income. If you’re still making mortgage payments on the property, then you could easily end up in financial ruin. This is where rental loss insurance comes in. It covers the lost rent as repairs are done on the property. This allows you to meet your obligations and mitigate financial loss.
- Flood Protection
You must purchase a flood insurance policy separately in addition to your landlord policy. This policy is run by the federal government through the NFIP (National Flood Insurance Program). Flood insurance will normally include coverage for the building, the contents of the building, and the replacement costs. Ask your insurance agent to help you with the purchase.
- Acts of Nature
Earthquakes, tornadoes, hurricanes, and other acts of nature can cause untold damage to your rental property. House insurance for rental property does not always include coverage for such events. If you own property in an area prone to tornadoes, hurricanes, and earthquakes, then you need to talk to your insurance agent about including these perils in your cover.
It is worth noting that you can never have enough insurance coverage. As an investor, it is always best to take a ‘safe than sorry’ approach to your investments. Talk to your insurance agent about how best to protect your property against disasters.
