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Does Landlord Insurance Cover Tenants' Damage?

Does Landlord Insurance Cover Tenants’ Damage?

If you’re a landlord, protecting your rental property with the right insurance also protects your investment. Yes, your landlord insurance can help cover tenants’ damage, but you’ll need to check your policy’s details.

Landlord insurance, also called rental property insurance, protects your rental property in the event of property damage and against liability should an injury or death occur on your property.

Here’s why you need landlord insurance

A homeowner’s insurance policy covers only the properties that are the primary residence of the homeowner, such as a house, townhouse, or condo where you are living.

Homeowners’ insurance covers your property, its contents, and personal liability for you, your partner, and your dependents. It does not cover your renters and their belongings.

If it’s a room in your house or other investment properties, your homeowner’s policy doesn’t cover these properties that are rented out. You’ll need landlord insurance.

What does landlord insurance cover?

How a landlord insurance policy typically protects you:

  • Can cover intentional damage by a tenant. (But check your policy)
  • Covers you if you’re legally liable for injuries or property damage to a third party arising from your ownership of the rental property.
  • Covers damage to your property, such as walls, floors, fixtures, heating and cooling systems and furniture (if furnished), subject to the terms of the policy. These terms indicate the risks that you're covered against, such as fire, explosions, wind damage, and specify the dollar limits you're covered up to.
  • Can include glass coverage, vandalism, and theft by tenants, but check your policy.
  • If you keep a personal lawnmower or snowblower on your rental property and it gets damaged, you’ll have coverage.
  • Loss of rental income: You’ll be compensated for lost rental income as a result of an insured event until the rented house can be re-occupied, or for the maximum allowed by your policy – whichever is less.

You can add sewer backup coverage or earthquake coverage to protect your rental property.

What doesn’t landlord insurance cover?

Landlord insurance does not cover wear and tear.

Note that if you rent out a room, a basement, or an apartment in a home that is your primary residence, you need to inform your broker. Not doing so may void your home insurance if you need to make a claim.

How much does landlord insurance cost?

It will depend on the type of rental property you have and how many rental properties you are renting.

At Western Financial Group, we are skilled insurance shoppers. As a top insurance broker, we work with Canada’s leading insurance companies to get you the right coverage to protect your rental property at the right value for you.

Can I ask my tenants to get renters’ insurance?

Yes, you can ask your tenants to get renters’ insurance but it is not legally required in Canada. Many landlords, however, recommend or may even insist on tenants having renters’ insurance as a condition of their lease.

What does tenant (renters’) insurance cover?

It helps protect a tenant against:

  • Theft
  • Fire
  • Water damage, but it depends on the specific policy and the details surrounding the water damage.
  • Cost of damages that you may unintentionally cause to your unit, other units or to your building
  • Unintentional harm caused to others who visit your apartment
  • Renter’s insurance can help with additional living expenses, bills, and food resulting from an insured loss.

At Western, you can get a discount when you bundle your renter’s insurance with your car insurance.