# Landlord insurance



## mrcheap (Apr 4, 2009)

I currently have a 2 bedroom condo rented out, and was forced to get tenant insurance for myself from the broker I bought from (apparently this is "tied selling" and is illegal, but I had a hard time finding an insurance broker who sold landlord insurance).

I'm up for renewal next month, and am paying $540 for the year (for landlord insurance on my condo, and tenant insurance on myself in the bachelor I live in), which seems like WAY too much to me.

a) Does this seem high to others?

&

b) Any suggestions / recommendations for finding other insurance brokers who are knowledgeable about rental properties?

Thanks!


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## Cal (Jun 17, 2009)

A little unclear....but you own 2 condo's, one you rent out, another (a bachelor) that you live in.

Why don't you have a clause in your rental agreement that the tenants must have their own tenants insurance.

Years ago, when renting I stayed at a place that required this from all tenants. It was cheap and easy to get.


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## iherald (Apr 18, 2009)

Cal said:


> A little unclear....but you own 2 condo's, one you rent out, another (a bachelor) that you live in.
> 
> Why don't you have a clause in your rental agreement that the tenants must have their own tenants insurance.
> 
> Years ago, when renting I stayed at a place that required this from all tenants. It was cheap and easy to get.


I would still want basic liability insurance and fire insurance, but you don't need content insurance.


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## Rico (Jan 27, 2011)

Do you own both condos? Or, do you own one that you rent out and rent another one to live in yourself?

Is what you are calling "landlord insurance" the coverage on the building part of the rented-out condo? I would think any bank would demand you have this. Contents insurance is up to your tenants. You can't cover their belongings just like they can't insure your building.

Contents insurance on your own residence is up to you but coverage on the building would again be mandatory I would think. I think anyone who doesn't get contents insurance (especially in a condo/apt) is taking a big risk.

As for the rate on both, $540 = 45/month to cover both doesn't seem that bad (depending on what you get in the policy and the deductible). I assume you're getting a discount being under the same insurance broker. There's also the fact that you can deduct the insurance cost against the rental income when you prepare you tax return.


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## Dana (Nov 17, 2009)

mrcheap said:


> I currently have a 2 bedroom condo rented out, and was forced to get tenant insurance for myself from the broker I bought from (apparently this is "tied selling" and is illegal, but I had a hard time finding an insurance broker who sold landlord insurance).
> 
> I'm up for renewal next month, and am paying $540 for the year (for landlord insurance on my condo, and tenant insurance on myself in the bachelor I live in), which seems like WAY too much to me.
> 
> ...



Can you define landlord insurance? Do you mean property insurance or insurance against lost rental income in the event of a claim? The latter is waaay expensive and harder to find. 

We have each property insured and we also have a $2mm blanket liability policy to protect against any lawsuits or liability issues. I have had insurers who have refused to insure a property that isn't "owner occupied", but I find that the large insurers (State farm, All State, etc) will do it.


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## mrcheap (Apr 4, 2009)

Hi all,

Thanks for your responses, sorry I was unclear.

I own a 2 bedroom condo that I rent out. I also am a tenant myself (in a bachelor apartment that someone else owns). Unusual, I know.

I want (and have, and am required by my mortgage) to have basic liability insurance and fire insurance on the 2 br condo that I own and rent out. I was offered insurance against lost rental income and it was very cheap ($40 for the year or something), but I didn't want it. I neither want nor have content insurance for the 2 bedroom (and would rather not have it for my apartment, but I was forced to get it).

In order to purchase this insurance, the agent required me to also buy tenant insurance on the bachelor I live in (that I didn't want and only bought in order to get covered on the 2BR I own).

For these 2 policies I'm paying $540 / year, which seems excessive (I realize it's deductible and have been deducting it for the last 4 years, but I still don't like overpaying on things, even if they're deductible). It was $307.80 / year when I first got it 4 years ago.

I'm coming up on renewal and wondered (for people who have actually had the experience of purchasing this style of insurance on an investment property):

1) Is this a reasonable price?

and

2) If it's not then:

A) Can anyone recommend an insurance broker with better rates who you know sells this type of policy?

or B) If you don't know anyone who sells this, any advice on finding someone? I've called a large number of insurance brokers when I was first trying to get a policy and NONE of them sold this (they all wanted to sell me car & life insurance, but didn't carry this and supposedly had no idea who does). Is it a specialized insurance broker I'm looking for? 

I've found it very hard to comparison shop for this...

Thanks again for your replies and sorry again if I was unclear


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## Rico (Jan 27, 2011)

I think your unusual situation threw us off but it's clear now. I own a house that I rent out while the market recovers and I'm renting in the city I moved to while I decide where to buy. So, our situations are actually a bit similar. 

I'm paying 986/yr or 82/mo total on a 3 bedroom 1242 sq ft house with finished basement and attached garage, and contents insurance on a 1184 sq ft condo. This price includes loss of rental income coverage if the place burns down.

I required my tenant to get basic liability/contents insurance. I chose to get content insurance in my rental.

Are you saying your landlord forced you to buy content insurance on the bachelor or the insurance company forced you to (in order to get basic coverage on your owned property)? That seems a bit odd.

Coverage on a rental property doesn't drop too much even though it's just the structure since you cannot control your tenant's behaviour - thus, the risk is higher. As for the jump from 307.80 to 540 /yr in premiums (a 75% increase), that deserves an explanation and I would raise hell to find out why that's jumped so much.

To be clear, you are looking for basic liability/structure/fire insurance on the 2 bdrm property you own + contents insurance you're forced to have on your bachelor rental. I'm surprised this is hard to find. I use TD insurance if that's any help.


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## GeniusBoy27 (Jun 11, 2010)

It's still hard to comment without knowing the details of the policy. You shouldn't require tenant insurance, and you can say no to that. That's your choice.

You do need insurance on your rental property. I'm paying about $250 this year on each of my properties, for the coverage you have. I'm with the Cooperators.


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## mrcheap (Apr 4, 2009)

Rico said:


> Are you saying your landlord forced you to buy content insurance on the bachelor or the insurance company forced you to (in order to get basic coverage on your owned property)? That seems a bit odd.


Yes, it's called "tied selling" and is illegal (but, obviously, happens). I still bought from him because I'd called a number of other agents who just refused to sell ANYTHING to me (I was starting to get nervous I wouldn't be able to get insurance).



Rico said:


> Coverage on a rental property doesn't drop too much even though it's just the structure since you cannot control your tenant's behaviour - thus, the risk is higher. As for the jump from 307.80 to 540 /yr in premiums (a 75% increase), that deserves an explanation and I would raise hell to find out why that's jumped so much.


Yes, exactly, I found it weird as well. I questioned my broker and he said that's the best he could get.



Rico said:


> To be clear, you are looking for basic liability/structure/fire insurance on the 2 bdrm property you own + contents insurance you're forced to have on your bachelor rental. I'm surprised this is hard to find. I use TD insurance if that's any help.


I'll try calling TD. I found it perplexing as well. The real kicker was ING refused to sell me insurance, then they were the insurer that my broker got me (so they wouldn't sell to me directly, but would through a middle man). Currently my policy is with Intact.


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## mrcheap (Apr 4, 2009)

GeniusBoy27 said:


> You do need insurance on your rental property. I'm paying about $250 this year on each of my properties, for the coverage you have. I'm with the Cooperators.


Hmm, I'll add Cooperators to my list of companies to try, thanks!


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## mrcheap (Apr 4, 2009)

GeniusBoy27 said:


> You do need insurance on your rental property. I'm paying about $250 this year on each of my properties, for the coverage you have. I'm with the Cooperators.


$250 is what I'm paying for the 2br condo portion of my policy (so that's in line with what you're paying if I can get rid of the bachelor tenant portion). It's a little strange as the condo building has it's own insurance (and there are less things that can damage in a condo unit), so I'd imagine I should be paying less (assuming your properties are SFH).


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## GeniusBoy27 (Jun 11, 2010)

You are paying less, relatively speaking. There are things that the condo insurance doesn't cover, namely the most expensive one being sewage backup. I had a friend's parents have their condo flood from the sewage backing up ... and it wasn't covered by the condo insurance, but their own personal insurance.


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## mrcheap (Apr 4, 2009)

Finally sorted this out <whew>. Apparently requiring tenants insurance is a way for them to make it residential insurance rather than commercial (which would be much more expensive).

I found an agent who could explain this to me and verified that I'm getting a good rate (to the point that he suggested I just renew with my current agent, he couldn't get me a better price).

If anyone is looking for a good commercial insurance guy his name and contact info is Sam Knack (519-740-7500 x2628) [email protected]

I don't know anything about him other than our one phone conversation but he was able to understand what I was looking for and the problem I was having when MANY other agents I talked to didn't have a clue.


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## OhGreatGuru (May 24, 2009)

_In order to purchase this insurance, the agent required me to also buy tenant insurance on the bachelor I live in (that I didn't want and only bought in order to get covered on the 2BR I own)._

I'm speculating here as to possible reasons why the agent may have thought this was OK.

1. Maybe he could offer a reduced rate if you covered all 3? After all, what are the odds of a multimillion dollar suit occurring on all 3? But in that case it shouldn't have been mandatory, just a rate condition.

2. Maybe he's concerned about you being sued as an uninsured tenant, and the plaintiff going after your condo assets for payment? 

Any insurance agents here with an opinion?


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## mrcheap (Apr 4, 2009)

OhGreatGuru: I think I've actually figured it out. If I buy it tied to a residential policy (on my principal residence), it's classified as residential insurance (and cheaper), if I buy it separately it's commercial (and more expensive on its own than with the tenant's package).


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