Date Published: 2024/03/02

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What kind of Insurance do you need as a Landlord?

A landlord standing in an apartment by the back door handing over the keys to the tenant.

A quick guide to landlord insurance for Canadian homeowners 

Purchasing a rental property and becoming a landlord can open doors to new financial opportunities and long-term investment growth. However, with great potential comes great responsibility. Whether you're a seasoned investment property owner or just dipping your toes into real estate, understanding your insurance needs is essential to protect your property and your financial well-being.

In this article, we will explore different types of landlord insurance, discuss the importance of tenant insurance, review the claims process and share tips to ensure your investment is protected with the right policy. 

Understanding landlord insurance

Landlord insurance, also known as rental property insurance, is specifically designed to protect property owners from financial losses associated with their rental properties. Unlike homeowner's insurance, which is intended for owner-occupied dwellings, landlord insurance provides coverage for properties that are rented out to tenants. Even if you only rent out a portion of your primary residence, such as a basement unit or a short-term rental like Airbnb, you are considered a landlord and need to have the right coverage.

Standard landlord insurance typically covers three main areas: 

  • Property damage: Protects against damage to the building and its contents caused by covered perils such as fire, vandalism or natural disasters. 
  • Liability: Provides financial protection if a tenant or visitor is injured on the property and holds the landlord responsible.
  • Loss of rental income: Helps compensate you for lost rental income if your tenants have to move out following an insured event.

You can also add riders to your policy that offer additional protection for specific risks beyond standard coverage. For example, if your rental property is in a flood-prone area you might consider adding flood insurance. Carefully review the terms and exclusions of your policy to ensure that it meets your needs. Consider working with an insurance broker who can help you understand what coverage is right for you and your rental property.

Differences between landlord insurance and tenant insurance

The main difference between landlord insurance and tenant insurance is that landlord insurance does not cover damage to your tenants’ personal belongings. This is where tenant insurance would step in. Most standard tenant insurance policies provide coverage for damage and theft of your renters’ possessions, as well as personal liability protection if their visitor is injured on your property.

Many landlords require their tenants to have a tenant insurance policy as a condition of their rental agreement. Requiring tenant insurance can help mitigate potential disputes and ensure everyone is adequately protected.

Landlord insurance claims and third-party involvement

The claims process for landlord insurance typically involves documenting the damage, filing a claim with your insurance provider and providing any necessary supporting documentation. It is important to maintain thorough records of the property's condition, tenant agreements and any maintenance or repairs conducted.

Depending on the situation, the claims process may involve third-party insurance companies, such as tenants’ or contractors’ insurers. Third-party claims can be a complicated process with longer resolution timelines, especially when liability is involved. Cooperation and communication with all parties are essential to ensure a smooth claims process and timely resolution. Communicate regularly with your insurance provider and follow their guidelines until the claim is resolved.

Tips for ensuring adequate coverage

To ensure you have adequate coverage as a landlord, consider the following tips:

  • Regularly review and update your insurance policy to reflect any changes in your rental property or circumstances.
  • Conduct thorough tenant screenings and background checks to minimize potential risks.
  • Maintain proper property maintenance and safety measures to reduce the likelihood of accidents or damage.
  • Communicate openly with your insurance provider and consider working with an insurance broker specializing in landlord insurance to find the right policy to protect your investment.

If you’re shopping for landlord insurance, contact an Orbit insurance broker at 877-976-7248 for a free quote.

If you’re a current Orbit customer and have questions about your existing landlord insurance policy, call to speak with an Orbit insurance broker at 877-976-7248.