Purchasing insurance for your rented dwelling can be an adventure for some property investors. This is especially true if your insurance provider is not an expert or has previous experience in attaining the proper coverage.
Here are some coverage and discount tips to help you get the proper insurance coverages:
Did you know that you can insure the rent you collect on a monthly basis? It is important to tell your insurance provider that you want that monthly income insured. For example you should tell them the total monthly amount and total annual amount you collect in rents for each property. Why should you insure your monthly rental income? Insuring your rents will help to protect your cash flow in the event of a claim and will help to pay your ongoing expenses. Picture this: Imagine if your building was struck by lightning and caught on fire causing significant fire damage. While your home is under renovation, your tenants will not be living there so that means they won’t be paying their rent. However, your regular expenses such as mortgage payments, electrical, water and hydro, property tax and insurance bills will still be required to be paid.
Did you know that there are different coverage types available for rented dwellings? The three main coverage levels are:
a) Fire & EC coverages
b) Broad Form
c) Comprehensive Form
Broad Form and Comprehensive Form are the recommended coverages to protect your investment. However no all insurance companies offer these coverages for rented dwellings. For example a comprehensive policy will include coverage for ice damming or collapse of weight of snow and ice. It is important to not just use price in determining your insurance purchase for a rented dwelling . Ask you insurance provider what type of coverage you have and what are the exclusions on your policy.
There are discounts or credits that can help save you money on rented dwellings. Here are some discounts that might help you save more money on your insurance:
• Claims free, sewer back up prevention device installed, no basement, detached 40 feet from other structures, hydrant protected, shuttle tanker protected, no mortgage
There are insurance companies that will discount the cost of certain coverages if you insure more than 1 location on the same policy. For example you can save up to 70% on your liability costs by having more than 1 rented dwelling on the same policy.
I know some of the tips above will help you on your property investment journey. It is important to have an insurance provider who understands rented dwellings.
Call Absolute Insurance Brokers at 1-877-941-2266 to get a quote on your rental properties.
