Home/House Insurance for an Income Property

[roopi]

So if I were to rent out my current home what type of insurance would I (or should I) have on the home? The home does have a mortgage (not high ratio).

Would I simply get fire insurance or is there more to this? :dunno:

[skandalouz_08]

Talk to MaskedBandit and he can give you precise answers to this with quotes. I believe it's just regular home insurance for fire, natural disasters and to cover replacement cost. The tenant would be responsible for tenant insurance for their own belongings inside the house.

[Masked Bandit]

You need rented dwelling coverage but your first step would be to talk to your broker. If you're renting out your current residence, you're obviously living elsewhere. I can only assume you have (or will have) insurance on your new residence so the rental property gets done as an extension of your main residence.

[roopi]

Originally posted by Masked Bandit
You need rented dwelling coverage but your first step would be to talk to your broker. If you're renting out your current residence, you're obviously living elsewhere. I can only assume you have (or will have) insurance on your new residence so the rental property gets done as an extension of your main residence.

Thanks for the information. Not renting it out yet (still living in it as a new house is being built). Just considering options and trying to determine costs before I do anything (sell the home or keep it as a rental).

[dawerks]

Also, you should ask for renters insurance FROM your renters. That way you are dually covered. It means you're not going to be paying for someone's mistake.

Call up your insurance company they'll let you know what needs to be done.

If you can afford it, KEEP it as a rental. It's a small pain in the ass now, but it's pretty amazing when you look back it later and have a few houses paid off. Easy retirement plan!

[mr2mike]

How are you dually covered?! Renters insurance costs like $10/month. It covers minor personal belongings.
For that $10, you think you'll be covered for anything regarding your property?

Also wouldn't call it easy retirement plan.
It's all easy until interest rates go up, market starts going down and the wear and tear of the wrong tenants starts to take it's toll.

[88CRX]

I have insurance on my rental townhouse and it's over $100/month, does that seem right? It covers my items left in the townhouse (just appliances), sewer backups and some liability stuff (I think) does that sound right? Renters obviously have their own renters insurance.

[roopi]

Originally posted by 88CRX
I have insurance on my rental townhouse and it's over $100/month, does that seem right? It covers my items left in the townhouse (just appliances), sewer backups and some liability stuff (I think) does that sound right? Renters obviously have their own renters insurance.

I contacted my existing insurance company (Meloche Monnex) and they quoted me $44.00/month. This only includes $10,000 in contents (appliances). I said no to the sewer backups and I raised the deductible to $1000.

Your quote seems pretty high. It could be the liability stuff? The home I live in is only $56.00/month with their $1,000,000 package/solution. So even with the liability add ons you may have it seems on the high side.

[Masked Bandit]

Originally posted by 88CRX
I have insurance on my rental townhouse and it's over $100/month, does that seem right? It covers my items left in the townhouse (just appliances), sewer backups and some liability stuff (I think) does that sound right? Renters obviously have their own renters insurance.

That can't be right. Most rented condos are $200 - $300 per year. Unless you property is a bareland condo and you are responsible for the structure as well (like a regular detached house) but it doesn't sound like it.

[Masked Bandit]

Originally posted by roopi


I contacted my existing insurance company (Meloche Monnex) and they quoted me $44.00/month. This only includes $10,000 in contents (appliances). I said no to the sewer backups and I raised the deductible to $1000.

Your quote seems pretty high. It could be the liability stuff? The home I live in is only $56.00/month with their $1,000,000 package/solution. So even with the liability add ons you may have it seems on the high side.

That seems pretty steep. On a rented condo we ususally run $10,000 contents (appliances), a year's worth of lost rental income, sewer back up and $1,000,000 liability and it usually comes in at $200 - $300 PER YEAR with a $500 deductible. You're at $528 and you don't have the lost rental income or the sewer back up AND your deductible is way too high.

Insuring a rental property without the lost rental income coverage is bording on professional negligence. MM never should have suggested that to you. Are you sure it's not in there?

[roopi]

Originally posted by Masked Bandit


That seems pretty steep. On a rented condo we ususally run $10,000 contents (appliances), a year's worth of lost rental income, sewer back up and $1,000,000 liability and it usually comes in at $200 - $300 PER YEAR with a $500 deductible. You're at $528 and you don't have the lost rental income or the sewer back up AND your deductible is way too high.

Insuring a rental property without the lost rental income coverage is bording on professional negligence. MM never should have suggested that to you. Are you sure it's not in there?

They are going to email me the details on it this week as I just got the quote of the phone and I wanted to read through it first. I'll let you know once I received the details. By the sounds of it I may be contacting you for a quote instead.

[88CRX]

I'm going to check when I get home tonight.

[guessboi]

Yes $44.00 / month or heck $100 / month is way too much for a rented condo or townhouse if the structure is insured by your condo corporation.

[Xtrema]

Originally posted by mr2mike
It's all easy until interest rates go up, market starts going down and the wear and tear of the wrong tenants starts to take it's toll.

Interest going up may not be a bad thing for landlords.

Cost is up but also for potential house buyers. Higher interest = higher barrier for home ownership = more renters.

Historically, when interest were high, renting cost more than owning. Now it's the opposite when interest is low.

[Ven]

Here's my dilemma. I own a place that I rent out. But the place where I live I don't own. Somebody sell me insurance for that :)

[Masked Bandit]

Originally posted by Ven
Here's my dilemma. I own a place that I rent out. But the place where I live I don't own. Somebody sell me insurance for that :)

That's easy, tenant insurance on your primary residence and rented dwelling coverage on the rental. We do it all the time.