Ontario real estate changes over the last while have created new challenges for both renters and landlords.
With the average rent across Canada at around $1,800/month as of October 2021, a 1.6% increase over the previous year (1), more tenants are having a hard time finding an apartment they can afford while more rental property owners are having a hard time finding long term reliable renters.
During the best and worst of times, landlord insurance can be a stabilizing factor in the strength and longevity of a property owner’s financial health.
WHAT IS LANDLORD INSURANCE?
Landlord insurance is something anyone who rents out a property they own should have.
This includes a rental home, apartment building or commercial property. Landlord insurance is meant to help protect a building owner’s investment property from financial loss.
WHAT DOES LANDLORD INSURANCE COVER?
Landlord property insurance
A landlord insurance policy will cover the physical building itself from damage caused by things like fire, vandalism, wind and lightning.
In addition to the main building, landlord insurance will generally cover other structures on the property (i.e. garage, shed, fence) and some types of personal property stored on-site (i.e. property maintenance equipment like lawnmowers and snowblowers).
Note: each specific policy will have varying deductibles and limits which will impact what can and can’t be covered after an insured loss.
Liability insurance for landlords
Landlord liability insurance is part of a policy that helps protect property owners in the event someone is injured on their property.
If the owner is found to be responsible or that their negligence contributed to the injury (i.e. a tenant slips and falls on an icy walkway which is the property owner’s job to maintain), liability insurance can kick in to cover the person’s medical bills and also any legal costs associated with the accident.
Loss of rental income insurance
One of the biggest challenges a landlord deals with is unpaid rent.
Rent arrears (a type of “priority debt” accrued when a tenants rent is not paid) were reportedly 58.6% higher during the pandemic compared to the previous year. (2) This type of instability makes it clear that a tool like rental property insurance is crucial for Ontario landlords.
Sometimes referred to as a rent guarantee, loss of rental income insurance should be included in a landlord’s policy because it helps replace lost rental income while the building is temporarily uninhabitable due to an insured loss.
This can be applied to either a commercial or residential rental property.
If a tenant is forced to re-locate from the property due to an insured loss, rental income insurance usually covers up to 12 months of lost rent a property owner would otherwise be missing out on.
Learn more about rental income insurance.
WHAT IS NOT COVERED BY LANDLORD INSURANCE?
Some personal property
While equipment a landlord owns and stores on-site to maintain the property is covered, personal items not used for property maintenance are typically not covered. A landlords personal bicycle, electronics etc., if stored on their rental property perish in an insured loss, they may not be covered.
If things like the hot water tank or central air conditioner break down on a rental property, the costs to repair and maintain them come out of the landlords pocket.
In the scenario of a total loss fire, the building itself is protected along with other structures and maintenance equipment. However, the personal content of the renters unit will not be covered by this.
Instead, their contents would be covered by their tenant insurance.
Room for rent in your house
If you own and live in a home where you rent out a room, landlord insurance does not apply to you.
WHAT DOES LANDLORD INSURANCE COST IN ONTARIO?
In Ontario, the average annual premium of landlord insurance is around $1,000 (typically there is a minimum premium per policy).
The specific cost of landlord insurance a property owner will pay varies based on several important factors such as:
Rental buildings in Haldimand or Niagara will generally cost less to insure than those in Toronto.
- Type of building
Commercial spaces usually cost more to insure than residential.
- Size of building/number of units
Bigger building = more renters = more risk = higher insurance costs.
- Age of building/risk factors
Generally speaking the older the building the more risk involved meaning the higher the cost.
If you’re looking for a landlord insurance quote, you’ve come to the right place.
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
Please contact us with any questions you may have about this or any other topic related to your insurance.