Ads Google

A landlord's essential: Tenant’s home insurance

by Caitlin Nobes on 20 Jun 2012
There are plenty of things to worry about when it comes to tenants, but few landlords require their tenants to take out home insurance – many don’t even ask if they have it. But there are good reasons to ask.

What happens if your tenant, distracted by their phone, leaves the water running and floods their bathroom? Not only is there damage in the bathroom and to their own belongings, but it’s poured down into the unit below, damaging more private property. Not only are you looking at a hefty bill, you could be named on a lawsuit for damages, which will at least require a lawyer’s time if not more.

“In that scenario you would be able to recover damages through their home insurance policy,” says Square One Insurance President and CEO Daniel Mirkovic. “If there was a lawsuit, which often nams everyone and anyone, you’re going to have to defend yourself, at least getting you name removed.”

If your tenant had liability insurance, this situation, and many other scenarios caused by tenant negligence would be covered.

But that's a big if, according to new research from Square One, showing just 60% of tenants have home insurance.

Some tenants think they are covered by their landlord’s insurance – a misconception investors might want to disabuse them of.

It is possible to extend your insurance to cover a rental unit in your primary property, such as a basement suite, but in general the insurance a landlord has to cover their investment is very different to the home insurance a renter might need.

There were other advantages for landlords in asking whether potential tenants are insured.

“It can do a bit of the filtering process for you,” Mirkovic says. “It shows they are financially stable and they value the possessions that they have.”



Post a Comment



Most Trending News

Canadian buyers returning to major cities, expecting to spend more: BMO survey
News

The survey shows that buying a home in a major city centre has risen 5% since last year.

Read More
Hiking development charges will only make homes more unaffordable
News

The more time and money a developer spends navigating the extensive labyrinth of procedural processes, the costlier it becomes to build a new home.The more time and money a developer spends navigating the extensive labyrinth of procedural processes, the costlier it becomes to build a new home.

Read More
Upcoming Multifamily Conference offers investors unmatched opportunities to learn, network and grow
News

Coming to Toronto May 14-15 is an in-person event discussing multifamily investing and the benefits it can have for new and experienced investors.

Read More