What is student housing insurance?
Student housing insurance is a specialized type of policy that is designed to protect landlords and property management companies from losses or damages to their rental properties. A typical policy will also cover the dwelling’s contents and attached structures such as a parking garage or storage shed.
It can also protect you from unexpected events, such as damages resulting from severe weather like a windstorm, fire, or vandalism, as well as third-party bodily injury and property damage claims if you are sued.
Student housing properties may include:
- Single residential dwellings
- Large multi-room student housing complexes
- Rooming houses
- Private residential properties converted to duplexes or triplexes
- Condominium units
What does it cover?
A comprehensive insurance policy is one of the most important investments you can make to protect your student housing rental property and your finances. A typical policy may include the following types of coverages:
- Commercial General Liability (CGL) Insurance: Sometimes referred to as premises liability coverage, CGL protects you from financial loss should you be liable for third-party property damage or bodily injury lawsuits that occur at your student rental property. For instance, if a tenant or a visitor to your property slips, falls, and requires medical attention, they could sue you for bodily injury damages. According to Statistics Canada, slip-and-fall accidents rank among the most common property accidents in Canada, with as many as 1.7 million falls occurring to people aged 12 and older annually, accounting for 40% of all injuries.
- Commercial Property Insurance: Commercial property insurance protects your student rental house from its contents from insured events such as fire, theft, or vandalism. Commercial property coverage may also include rental income coverage, which replaces lost rent payments if a property is temporarily uninhabitable after a covered claim.
A commercial property policy also typically includes the following coverages:
- Building owner’s contents coverage: If your student rental property contains contents that belong to you, such as a washing machine and dryer, stove, refrigerator, and dishwasher, you can get additional coverage for these items.
- Rental income coverage: If, after an insured loss, your property is uninhabitable while repairs are being conducted, you can be covered for lost rent, since there is a reasonable likelihood that you may lose your existing tenants.
- Sewer backup and overland flood protection: These types of endorsements can provide you with coverage from water-related damages to your property, and water damage is the no. 1 source of property claims. If the municipal sewer line that connects to your property should backup and force raw sewage into your building, the cost to repair that damage can be significant. A sewer backup endorsement on your policy is designed to cover the cost of those repairs. Likewise, should a flood after excessive rainfall affect the neighbourhood where your property is located, or if nearby lakes or rivers overflow and damage your property, overland flood protection will pay for the damages to the property up to a specific limit.
- Equipment breakdown coverage: Equipment breakdown insurance, also referred to as boiler and machinery insurance, provides financial coverage for the costs associated with repairing or replacing equipment such as kitchen appliances, on-site laundry facilities, or the building’s heating, cooling, and ventilation system if any break down or are damaged due to a mechanical or electrical failure.
How much does student housing insurance cost?
The cost of an annual premium for a student housing insurance policy depends on several factors, such as:
- The location of student property rentals
- Years of experience as a rental property owner
- The age of the building
- The risk management practices you currently have in place
- Number of rental units and student tenants
- Annual and projected revenue
- Coverage selection for your policy
Many student housing landlords carry at least $2 million to $5 million of liability coverage. You have the option to select the limits and deductibles of your policy as you see fit. It may be worthwhile to have a conversation with a licensed broker to guide you through the process, help you determine what your liabilities are, and determine what the right level of coverage is for you.
Why do student rental house owners need insurance?
Cities and towns with university and college campuses offer great investment opportunities for property owners looking to own and manage a student rental property.
However, student rental housing calls for specialized insurance. Though not all student housing properties are the same, insurance policies for student housing can vary significantly. Some insurance companies may consider student housing to be a high-risk proposition, and may not provide coverage for them.
That’s because when you’re renting individual rooms or a single property to post secondary students, you’re often dealing with young adults who are on their own for the first time in their lives. Furthermore, student rentals typically require a lot of maintenance, mostly due to turnover, neglect, or the young tenants’ lack of knowledge as to how to deal with minor repairs or issues. Plus, they may not always be the most responsible tenants. One way to offset that risk is to ask for their parents to co-sign the lease, which can protect your income, investment, and help keep your insurance premium low.
A student housing insurance policy is vital to keep your property and its contents safe. Without it, any damage or financial losses you suffer can be potentially ruinous, especially if an accident or incident occurs and you are named to a third-party lawsuit.
How can student rental property owners reduce their liability risks?
There are a few ways you can mitigate the general liability risks that a student rental housing complex or shared house property may have, including:
- Request multiple references from each tenant
- Require student tenants have a parent or legal guardian co-sign the lease and only provide annual leases for each student to whom you rent
- Require student renters have their own tenant insurance policy and include the requirement in the lease
- Insist all cooking be done in a kitchen and do not allow hot plates to be used
- Inspect the exterior of your property monthly and the interior semi-annually
- Do regular maintenance and upkeep of the property to prevent damages or other issues
- Have an emergency escape plan and fire extinguisher posted in the building in case of fire and a first-aid kit and medical emergency plan
- Have a contract in place for snow removal with a local contractor to keep your driveway, walkway, and sidewalk out front of the property clear of snow and ice to prevent slips and falls
Common claims scenarios
Frequently asked questions