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Insurance Tips for Landlords

Guthrie Insurance

Many people own property that they lease on a regular basis to tenants. Others may occasionally lease their homes for special events. In each case, proper insurance and risk management techniques are needed to protect your interest as a landlord.

Some tips for landlords who own property they rent on a continuous basis -

  • Adequate liability coverage. Consider limits of at least $2,000,000 with higher limits e.g. $5,000,000 depending on the budget and risk/exposure.
  • A carefully considered property policy is needed for the property exposures to these rented units - building, appliances, furnishings. Make sure you are familiar with the loss settlement basis - replacement cost (guaranteed?) versus actual cash value and what perils or risks you are insured for i.e. limited perils or broad form?
  • Verify that the renter or lessee has proper tenants insurance for this leased property by obtaining a certificate of insurance.
  • You should also require in your lease that your tenant list you under his or her insurance policy as an additional insured landlord, particularly if the tenant uses this property in any commercial endeavor.

Insureds who own property that is occasionally rented on a short-term basis should consider the following recommendations.

  • Collect a sizeable damage deposit from your tenant and check his or her references.
  • Use a short-term rental contract making the tenant liable for all damages to building and personal property and all injuries.
  • Only rent the property to parties that currently have a homeowners or tenants policy in force or to businesses with a general liability policy in force.
  • Ask your tenant for proof of liability coverage, which can be found under his or her homeowners policy or general liability policy.
    Sources: International Risk Management Institute and Guthrie Insurance Brokers Ltd

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