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Having a rental home or owning multiple properties in Manitoba can be a great investment! However, this great investment can turn into you hemorrhaging money fast without the proper coverage in place. So, what type of insurance should you have for your rental properties in Manitoba?
Firstly, you’ll want to secure rental insurance. This will help protect your rental property, your possessions, and any liability claims coming from injuries that happen on your premise. Then, we recommend looking at additional coverage add-ons, such as service line coverage.
If a rental property is in your near future– keep reading! We cover everything you need to know about rental property insurance, landlord insurance, tenant’s insurance, and why standard home insurance isn’t enough in Manitoba.
Want to skip the reading and jump right into securing rental property insurance? Get in touch!
When it comes to your primary residence, standard home insurance is key. It covers your physical house or condo, any additional buildings on your property, and all the personal belongings you keep in the house. And, they offer liability coverage for you, the homeowner. But, for a rental property, the standard homeowner policies you’re used to will fall flat because they can’t cover the renters residing in your home. That’s why the moment that you start renting your property, you need Rental Property Insurance!
Where standard home insurance covers your home and belongings, Rental Property Insurance (also known as Landlord Insurance or Revenue Property Insurance) goes further, adding on liability coverage in case your tenants or any visitors are injured on the property, as well as any loss for rental income.
Most rental properties are covered under what’s called a “Named Peril” basis. This means you’re only covered for the risks—or perils—that are explicitly listed on your policy. Often, these are things like fire, lightning, and hail. Insurance companies do this to protect themselves because with unknown people occupying the home, they’re taking on a higher level of risk.
Each rental property policy is different, so you’ll want to make sure the coverage you get reflects your specific situation. Before you pick a plan, take the time to talk to one of our Insurance Consultants about what’s important to you. They can give you the best answers on the coverage you need!
That said, generally speaking, your Rental Property// Landlord Insurance will cover:
Unfortunately, a lot of things are not covered by a standard Rental Property Policy. Two main types of claims that are not included are:
(For tenant possessions and liability, your tenants will need to secure their own renter’s insurance.)
As we mentioned above, most rental insurance policies are covered on a “Named Perils” basis, meaning only very specific types of claims will be allowed. But, there are some providers that offer more comprehensive policies.
Comprehensive Rental Property Coverage covers your home and your belongings on an “All Perils” basis. This means the insurance company will cover most damage to your home and your personal property—as long as the “peril” that caused it isn’t explicitly listed as an exclusion on your policy. This is a great option, especially since renting out your property is riskier than living in it yourself! But it’s important to note that this increased coverage comes at an increased cost.
We recommend looking into your policy to find out if it automatically includes coverage for any additional buildings on your property, the contents of all your buildings (if required), and liability. These are important coverages to have, but they’re not included under every policy automatically. If you need them, you may have to add them separately, at an additional premium.
Other additional coverages to consider are:
The specifics of rental insurance are different for each person, so the cost of Rental Property Insurance can vary. But, it’s worth noting that your Rental Property Insurance will likely cost more than your standard home insurance policy.
There are no specific considerations for acquiring rental insurance for all your properties, but once you have a certain number of rental properties, you may need to move your policy to a specialty, commercial market.
Most landlords rent their properties out on a year-to-year basis. And, many insurance companies actually require that you rent your property out on a yearly basis, regardless of whether you take month-to-month or yearly lease payments. But, there are options available for month-to-month rentals, too.
If you’re looking to book short-term rentals, speak with one of our Insurance Consultants and explain your situation. (Just keep in mind that you’ll be looking at different requirements from your insurance provider and that many insurance providers won’t cover short-term rentals at all.)
Short-term rentals like Home Share, Airbnb, Home Away, and VRBO are becoming more and more popular, but standard home and rental insurance policies don’t cover damages or injuries resulting from short-term rental activity.
So if you plan to rent out your property on one (or all) of these sites, you’ll need a policy that has the following coverage:
Whether you rent your whole house or just a portion of it, it’s best you talk to one of our Insurance Consultants to make sure you have the correct coverage (and enough of it) in place!
Tenant’s insurance (also known as renter’s insurance) covers your tenant’s belongings—the contents of your rental property—and provides them with liability coverage, in case they’re responsible for any damage to your rental home.
Most insurance companies don’t require tenant’s insurance in order to cover you, the landlord, but it’s a very good idea to request your tenant’s purchase and show proof of their renter’s insurance.
No, you can’t force your tenants to purchase their own insurance coverage. But you can make it a rental requirement so that without it, they can’t rent from you.
A property becomes vacant the moment all occupants have moved out (and are not returning). It’s also considered vacant before new occupants move in. If your rental property sits vacant for more than 30 days, you’ll need to add a vacancy permit to your policy, to make sure the home remains insured throughout the vacancy.
A vacancy permit is an endorsement from the insurance company that reduces coverages to your policy for a certain length of time. To issue one, most companies will require that you complete a vacancy questionnaire, and provide photos of the front and the back of your home. If your home is vacant and you don’t have a vacancy permit on your insurance policy, your home may be completely uninsured—meaning that any claim that arises could be denied.
Worth noting: A vacancy permit could cost you twice as much (if not more!) than your current insurance policy.
Every rental situation is different, and the best insurance for you will depend on your individual circumstances. To find your best insurance solution, talk to one of our Insurance Consultants! We’ll help you sort through the noise and put the perfect coverage in place.