Condo Rental Property Insurance

Condo Rental Property Insurance

Low-cost, comprehensive insurance protection for condo rental property landlords

Zensurance - Condo Landlord Insurance

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Condo Rental Property Owner

Insurance for condo rental property

Also known as landlord insurance or rental property insurance, a landlord condo rental insurance policy is designed to protect landlords who rent out condominium units to tenants from financial losses, such as damage to the unit caused by fire or water, as well as third-party bodily injury and property damage claims.

Condo rental property owners need to protect their properties, contents, finances, and investments in a condominium unit.

Although it’s similar to a standard homeowner’s policy, a condo owner’s rental insurance policy protects the interior of your unit and the contents you own. A condominium corporation managing the building also has strata insurance or condo corporation insurance to cover the building’s common areas, but that insurance does not protect your unit.

A landlord’s condo insurance for a rental property covers your specific unit and any contents you own (kitchen appliances, furniture, permanent fixtures) if damaged or destroyed by fire, water, a natural disaster, theft, or vandalism.

It also covers landlords for liabilities arising from their condo ownership and loss of rental income. Also called ‘fair rental value’ coverage, loss of rental income protection is designed to replace a landlord’s lost rental income if the unit is temporarily uninhabitable after an insurable loss while repairs are underway — for example, fire and smoke damage to the unit.

A condo landlord insurance policy for a rental property typically includes the following types of coverage:

  • Commercial General Liability (CGL) Insurance: CGL, or general liability insurance, protects condo rental property owners from third-party bodily injury and third-party property damage claims arising from incidents and accidents in your unit. For instance, if a tenant is injured after a fall inside your unit because of uneven floor tiles, they could hold you responsible for not fixing them and seek compensation for their injuries and medical rehabilitation.
  • Commercial Property Insurance: Commercial property insurance covers condo rental landlords for damages to the unit and the contents you own in it if damaged or destroyed by fire, water, a natural disaster, theft, or vandalism. It includes coverage for your rental income if, following an insurable loss like a fire, the unit is uninhabitable, and tenants can only reside in the unit once repairs are completed.
  • Equipment Breakdown Insurance: Equipment breakdown insurance is designed to pay for repairing or replacing the equipment in your unit, such as the kitchen appliances and HVAC system, if they cease to function properly due to an internal mechanical or electrical issue.

There may be other types of coverage you need to include in your policy to maximize your protection, such as:

  • Flood Insurance: Although commercial property insurance covers water damage in your unit caused by a burst water pipe within the walls or ceiling, many condo rental unit property policies do not automatically include protection against overland floods. Adding this type of coverage to your policy can help pay for damages to your unit due to flood waters entering the dwelling from the floor, walls, roof, windows, and doors.
  • Loss Assessment Insurance: This coverage is an optional endorsement that you can add to your condo insurance policy. It helps protect you if you live in a shared community, like a condo or homeowners association (HOA), where you’re responsible for a portion of damage or loss in a common area.
  • Renovations Insurance: Any non-structural renovations taking place in your condo would require a separate, temporary renovations policy if the duration of the work is longer than 30 days.
  • Legal Expense Insurance: If a tenant refuses to or cannot pay rent and you want to evict them, you may face a lengthy and expensive legal battle to evict them or receive the funds you’re owed. Legal expense insurance pays for legal advice and the cost of retaining an experienced lawyer. Furthermore, legal expense insurance can cover a lawyer’s fees if you are audited by the Canada Revenue Agency (CRA) and require help appealing a decision by the CRA.
  • Airbnb or VRBO Insurance: If your condo corporation’s management board permits you to do short-term rentals through a home-sharing service like Airbnb or VRBO, you will need Airbnb insurance or VRBO insurance. These policies cover accidental damages to your unit, theft, and bodily injury or property damage caused by guests or visitors during their stay. Listing your property on Airbnb or VRBO makes your residence a business property, and you must inform your Zensurance broker if you intend to do so, or your insurer could cancel your condo rental insurance policy.

Various insurers charge different premiums for a policy designed to cover a condo rental. What your annual premium as a landlord is depends on several factors, including:

  • The location of the building
  • The age, condition, and type of condominium building or complex your unit is in
  • The size of your condo unit and its value
  • The contents you own and permanent fixtures in your unit
  • The unit’s and building’s security features
  • The coverage limits and deductibles you choose
  • Your years of experience as a landlord
  • Who your tenants are, and how many tenants you have
  • Your annual and gross projected revenue as a landlord
  • Your business insurance claim history

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Common claims scenarios

Burst Pipes - Condo

Problem: A burst water pipe in a unit above leaks into your rental unit, damaging the ceiling and walls.

Outcome: Commercial property insurance may pay to repair the water damage to your ceiling and walls.

Kitchen Fire

Problem: A fire in your unit’s kitchen inflicts smoke and fire damage, making it uninhabitable for your tenant. They are forced to live elsewhere for a month while repairs are underway, causing you to lose that month’s rental income.

Outcome: Commercial property insurance may cover the damage to the kitchen and appliances caused by the fire, and the rental income endorsement in the policy may replace lost rent payments up to the specified coverage limit.

Refrigerator breakdown

Problem: The refrigerator in your condo rental unit malfunctions due to an electrical short and ceases to function.

Outcome: Equipment breakdown insurance may cover repairing or replacing the damaged refrigerator.

Frequently asked questions

Does condo rental insurance for landlords cover intentional damage caused by a tenant?

No. Condo rental insurance for landlords typically does not cover intentional damage caused by a tenant, such as vandalism or malicious destruction of your property. However, you may be able to include optional coverage to safeguard yourself from this type of risk. Speak to a Zensurance broker if you have concerns or questions about such risk.

Does insurance for a rental condo cover my tenants?

No. A landlord’s or owner’s condo rental insurance policy does not provide coverage for a tenant’s belongings or their liability risks. It’s advisable to encourage your tenants to purchase tenants’ or renters’ liability insurance to cover the risk of damage and loss to their possessions housed in your rental unit.

Can I cancel a condo rental insurance policy if my unit is unoccupied?

You may be able to cancel or modify your policy if the unit is unoccupied for an extended period. However, a vacant unit also poses damage and liability risks, and you might require vacant property insurance to protect yourself if someone is injured in the unit while visiting or viewing it or if there are damages to the building resulting from an insured loss, such as a fire or severe weather.

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