Attention Real Estate Investors: Single and Multi Family Rental Property Insurance Policies

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Attention Real Estate Investors: Single and Multi Family Rental Property Insurance Policies

Multifamily houses have been a hot commodity for real estate investors over the last several years. With banks allowing low interest rates and the increase in home values, owning a multifamily property has been a great investment for investors.

There are a couple of popular ways to insure these types of buildings:The rental property if eligible can be added as an additional location to an existing homeowners, condo or tenants policy. Liability is extending from your principal residence to the rental property.   The insurance company calculates the additional cost to insure the buildings, contents, etc. Costs can be saved for this option but there are some common pitfalls.

1) typically insurance companies will cap the amount of properties or “doors” that can be added to the principal residence policy.

2) claims presented against the policy can affect the eligibility of all the locations listed on the policy. For example if there are two claims presented for any location, will your insurance company non-renew the entire policy.

The rental policy can be insured on a separate commercial policy. The insurance company calculates the cost for the liability, building, contents etc. The building can be insured under a personal name or a corporate name. Many investors have a holding company as the owner of their rental properties. The advantages of these types of policies are:

1) numerous houses can be added to the same policy or a policy for each location can be completed.

2) the policy can be issued in a personal name or a corporate name.

3) a claim presented against a property will not affect the eligibility of your primary residence.

What are the common coverages to purchase for rental property insurance?

There are various coverages that you can and should purchase for your property to help protect from unexpected claims. Here are a few of the common coverages that can be purchased:

These two topics will help guide you during the initial stages of insuring your rental properties.   It is best to speak with a licensed insurance broker to determine the best option to insure your rental properties.  We are here to help with those discussions.  We can answer your questions at 1-877-941-2266 or by emailing us at contact@absoluteinsurance.ca.

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