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Often misunderstood, or simply overlooked, is proper and adequate insurance coverage for your rental property. A “loss”, may mean the difference between a simply aggravating situation or a financial calamity for the owner!
With financial markets over the past decade offering lower rates of return, the insurance industry, as a result have revisited their underwriting practices. They have adopted a far more stringent underwriting strategy towards investment properties. They have decided that the best risk they want to accept is an owner occupied property. Generally they will however insure a rented property providing they can also insure the owner’s principal residence assuming it’s in the same province. Without the principal residence, insurance companies will either substantially increase the premium and offer less coverages or more commonly, refuse or terminate the policy.
It’s important to note that while some companies are willing to insure a rented property, may limit or reduce coverages. One such coverage which is often not covered is sewer backup. With the city’s infrastructure aging, the likelihood of such an occurrence is more possible. Another misunderstood practice is insurance companies offering replacement by ACTUAL CASH Value versus Guaranteed Replacement cost. It is quite common that some rented policies will only offer ACTUAL CASH value replacement for any loss. This means they will pay you the replacement cost LESS ANY DEPRECIATION based on age and wear and tear. If the coverage offered is Guaranteed Replacement Cost then, the insurance company will pay up to the building value stated in your policy or whatever it will cost to rebuild, PROVIDED THE BUILDING IS INSURED TO 100% OF ITS ESTIMATED REPLACEMENT VALUE. If your existing insurance company is willing to continue to insure you, be sure to ask if Sewer Backup and Guaranteed Replacement Cost coverages are included.
While recognizing the difficulties in obtaining a reasonably priced insurance policy offering good coverages, we offer a special insurance program that is unique to Landlord offering among other coverages, sewer backup and Guaranteed Replacement cost (subject to qualifying properties). Making this another reason to choose landlord as your property manager.
To know more about our insurance program please contact a representative of Landlord.
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