# landlord insurance for rental property, GTA and surrounding area



## digitalatlas (Jun 6, 2015)

Who do you go with to insure a rental property?

I know that most insurers won't touch your rental unless you insure your primary residence with them. But my insurance broker won't insure the rental property because it's over 100km from my residence directly, they refer to me to their business partner near the rental who gave me an outrageous quote...so i ditched the home insurance and went with a third option who was willing to insure my primary residence and rental for a reasonable price. 

Unfortunately, this required me to unbundle my home/car insurance package, so lost some discounts. I tried moving my car insurance to the "third" option that currently insures my homes, but they gave me an outlandish quote for auto insurance (why can't this just be easy?). anyway, I'd like to "re-bundle" my home with my existing (original) insurer, but that requires me to still get insurance on the rental property.

who do you guys use, particularly if it's not bundled with your primary residence in the GTA?

i had a few leads before, and i explored all of them but one. Atrens Counsel, brokerage in the GTA. But it's like I'm too small a fish for them or something, because I contacted them twice (once by phone and once online) and was expecting a call back, but didn't receive a reply either time....

Thanks.


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## Just a Guy (Mar 27, 2012)

I just contacted my broker. There are several insurance companies who cover rentals, wawanesa, intact, economical, etc. I've never had to tie my properties to my personal residences and the insurance is cheap.


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## digitalatlas (Jun 6, 2015)

my current broker is humberview. i tried a few other brokers and one gave me an outlandish quote, others were simply more expensive for less coverage than humberview (aviva). but they couldn't get me decent car insurance.

atrens counsel is another broker, i think they deal with intact. but they didn't get back to me, twice.

any broker recommendations?


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## naysmitj (Sep 16, 2014)

Personal Insurance Company has all my insurance including rental. Very good pricing as well.


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## mikep (Mar 13, 2017)

dave hall @ north Blenheim mutual insurance does all my rentals. 519 635 4653. 
I don't think i'd get a better rate or service anywhere else.


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## digitalatlas (Jun 6, 2015)

OK so time flies, it's been about a year already and my home/landlord insurance is up for renewal. My insurance with Aviva went up about 13%, they adjusted all the coverage up by about 5%. I think that's pretty excessive...where's this number coming from, certainly not inflation.

So do you get covered based on the market value of the house (rental)? I thought it was based on replacement cost, but market seems to have gone up way faster than replacement cost, or are we saying replacement cost is higher now simply because market price is higher? Seems like a bunch of people in the real estate industry pocketing money at the expense of housing affordability....

So i previously had coverage for $410k on the detached rental. This year they've upped it to $430k. They increased everything else for my primary and rental and the cost this year is about $100 more than last year (about $720 to $820)

So I called another broker that has a group rate, for which I'm eligible through work. They gave me basically the same coverage as this year's updated figures plus more overland water coverage and no cost financing, for basically $50 less than what I paid *last year *(so $150 less than what my current company will cost me this year). However, when I got the written quote, despite being clear about the amount, they it only indicates coverage of $360k (vs $430k).

From a discussion I had in the past with a broker, it seems that the replacement value is automatically generated based on the details of the house. So my question is, why did this second broker generate such a lower value for replacement cost at $360? Is that even right? Are they missing something huge, because I don't want to be under insured?

Secondly, both of these numbers are way higher than the price I paid for the house, even though the higher one is closer to current market value. So should you insure to market value? If it's an automatically generated figure, should I ask them to adjust it higher and give me a quote? I also don't want to pay for insurance I don't need and will never use (i.e. way more than replacement)...

I will also get some quotes from Personal Insurance Company and North Blenheim Mutual and call it a day, it will be one of these guys. I called Atrens Counsel again, this is the third time, the broker said she'd get back to me, and again...the third time....haven't heard back. I also called another broker, left a message, and no one even called back. These guys must be doing amazing business, that they can afford to just not get back to people.


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## mikep (Mar 13, 2017)

you're paying $820 a year for insurance on a detached house valued at 430k?
id say that's pretty good


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## digitalatlas (Jun 6, 2015)

well some quotes set rebuild value at $430, one at $360k, and a couple others somewhere in between. Market value is about $400. So my question is, which one is correct? 

Their computer systems do the calculating, I don't want to be over or under insured (don't want to pay for insurance i don't need but also need to have enough insurance).

Should I specifically ask to set rebuild at a figure of my choosing, like something closer to market value?


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## Just a Guy (Mar 27, 2012)

Take a look at your policy, a lot of packages include a "contents" section to cover appliances, hot water tanks, furnace, etc. As well as upgrades such as hardwoods. Many times the amount of "standard" coverage is ridiculously high since you, as a landlord, usually don't provide many contents. 

Many new landlords don't read the policy, and also hunk of it as a house, not a rental, so they miss that section, or don't really think about it. I think the minimum coverage you can get is around $25k, which should more than cover your needs in most cases, but the "default" coverage is much higher. 

There are a few sections like that that you should look at. I remember having one policy that had sewer backup as a really high portion of only a single property (when you have a lot of properties on a single policy you can miss one being really far out of line). It was an unfinished basement with only a furnace, hot water tank and an old washer dryer, why would I want sewer backup coverage for almost $2000? The tenants insure their own goods. I dropped that coverage. No idea why it went up from a few bucks to $2000 either, I'd never had a sewer backup in he place, still haven't, but in one year, this one subsection of multiple policies accounted for nearly the entire increase. 

The broker tried originally to pass off the increase as just inflation on all my policies, I took the time to go over the coverage and find the truth.


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## digitalatlas (Jun 6, 2015)

Thanks, I've looked through the policies in detail (which I always do). For the rental, and this has been true of several brokers I've contacted, the coverage is for the dwelling (in this case, 360-430k). My existing insurer, I had asked for 50k in sewer backup coverage. I have some past work experience dealing with insurance and water damage, so I've learned to keep good water damage insurance (whole other story).

The new insurer (that set dwelling at $360) said that the limit for sewer backup was up to the rebuild value. It's a separate line item, I would pay a premium for it, but basically the same amount I pay my existing insurer for the 50k coverage. I don't know if I can pick separate values for rebuild and sewer coverage, to adjust the premiums, cause the sewer coverage costs about 20% of the whole policy and even though I want good water damage coverage, $360k seems like overkill.


I also asked about landlord's property (stove, fridge, etc. not much) and I probably would have asked for maybe 5-10k in coverage, but she said that it was also included up to something like 75% of the rebuild value, and it's "included" in the premium so I can't remove it as a line item or reduce it. 

And you know what??? In fact my existing insurer is Aviva, and the new one is Aviva Traders...isn't that the same company???

And in the past, I got quoted from State Farm, which quoted me a premium that was like 3 times higher than several others!




I can't understand it. The bottom line is, the new potential insurer, they set a lower rebuild value ($360) but, includes pretty much kind of coverage I would need for a lower price. 

My question is, why would the rebuild be set so much lower than other insurers, and should I ask for more coverage to match what (some) other insurers are quoting on?


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## Just a Guy (Mar 27, 2012)

Rebuild is not resale. Resale (price you'd get if you sold) includes land, building, area, etc. Rebuild value is just the structure. The cost of that depends on the area and contractors, but usually there is a pretty simple cost per square foot (depending on upgrades of course like granite and hardwood for example). Insurance companies just have to plug that into a simple formula and get their value.

Some insurance companies ask what the value of your property is and, inexperienced people give them the resale value...which is better for the insurance company as they get more money and have lower costs if anything actually does go wrong.

P.S. Those all inclusive policies sound good but, in reality, your over insured and paying too much. You may want to look for an a-la-carte company.


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## digitalatlas (Jun 6, 2015)

Well last year it got appraised at 300k, well below the 430 and even 430 that they're trying to insure it for. Market value has changed, but of course that's distorted, because I can't believe that in one year the rebuild cost would go up by 100k, even if there's some inflation.

so then 360 really should be enough for rebuild, shouldn't it? In fact, I just checked my quote from state farm last year, and they only put in 240k for rebuild....which...actually is consistent with the appraisal of 300k because part of it is land at the house was only appraised at around 240k.

so does that mean home insurers are all pretty much ripping everyone off by quoting based on market value, and most people don't realize that they're probably being over insured and paying more than necessary? 

i'm not specifically looking for an all-inclusive policy. it's just what they happened to offer through a group discount plan, and they are in fact still giving me the lowest quote of several competitors.


all this being said, since the market prices are kind of distorted now in southern ontario, is it not prudent to get insured up to the market value? let's say it costs 200k to rebuild a house, but the market value is 400k. what builder would be willing to rebuild your house for 200k if they could just build someone else a house and make 400k? obviously if market value was below replacement cost, then you'd insure up to replacement cost, no question. but I can't believe that market value is below replacement cost right now. thoughts?


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