Common Landlord Insurance Questions

Common Landlord Insurance Questions That Property Owners Have

Do I Have To Buy Landlord Insurance?

The simple answer is no. You are not required by law to carry landlord insurance on your properties. However, this doesn’t mean that you don’t need to. Landlord insurance can protect you from incidents such as vandalism, liability claims, building fires, storms, and other hazards.

In the event that you do not have insurance, you will have to pay out of pocket for these expenses when they occur. Some property owners are under the misconception that their homeowner’s insurance policy will cover any damages that occur when the property is rented. This is not true.

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How Much Does A Typical Landlord Insurance Policy Cost?

The answer to this question is going to be more specific to you and your property. Think of this insurance the same as you would a car or life insurance policy. It depends highly on your individual circumstances. Some factors that will influence your insurance premium include:

  • Geographic Location
  • Age and Condition Of Rental Structure
  • Type Of Coverage You Purchase
  • How Many Safety Features (Fire Sprinklers, etc.) You Have Installed
  • The Building Meets Code Requirements
  • Structure Size

In all reality, a small rental unit with one or two apartments could cost a low of $500 per year. Compare this to a larger structure with ten rental units and the price could be $2,500 per year. The price really sways depending on the specific factors involved.

We highly urge you to get multiple quotes from various providers to compare an average cost for the rental unit(s) that you have. Ensure you opt for the same add-ons when getting quotes as this will give you the most accurate comparison between policies.

Is Landlord Insurance Eligible For Tax Deductions?

Yes, it certainly is. The insurance premiums that you pay out monthly or annually is considered part of a business endeavour. This means it classifies as a business expense and business expenses are tax deductible.

Does The Tenant Still Need Renters Insurance?

Realise that landlord insurance and renters insurance are two different things. Renters insurance is specifically geared towards covering the renter’s possessions in the event of a disaster. These include things like wind, hail, fire, theft, riots, and another weather phenomenon.

As a landlord, you can make it a requirement in your lease that the renter obtains their own renter’s insurance policy. You can even specify what minimum amount of coverage they must maintain. Although renters insurance is not required by law, you can legally make it a requirement to rent your property.

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