Income properties, whether you’re renting out a portion of the house you are living in, or the whole place, are a great way for to make some passive income and help cover mortgage costs. If you own an income property, and it suffered damage due to a fire, storm, or flood, do you know what happens to your tenant(s) during the restoration process? Are you, or your insurance provider liable for the damages to their property and helping them find a place to stay? The answer to all of this is no.
When it comes to tenants, your property insurance only covers the structure of the building and any injury that happens on the property. To protect their belongings, tenants need to purchase a separate type of insurance known as tenant insurance. Tenant insurance covers a tenant’s personal property, as well as accommodation, if alternate options are needed due to damage to their rental.
While tenant insurance is not mandatory in Alberta, there are many great reasons to have it and to encourage any renters of your property to get it before moving in.
Being prepared for the worst-case scenario
No one wants to think about the worst-case scenario, but accidents can happen to anyone and being prepared is better than being caught off-guard. If a tenant is lucky enough to never have to make a claim through tenant insurance, that’s great, but in the event of a fire or flood, that added protection can save them thousands of dollars in replacement of their belongings. Tenant insurance also covers a tenant from liability if someone visiting your rental is injured.
Saving money when replacing personal belongings
After a disaster occurs, one of the biggest expenses can often be replacing belongings, especially electronic ones. While individual items may not be expensive, the costs add up quickly when they have to replace everything. With tenant insurance there is piece of mind that comes with knowing that if a tenant does have to replace everything, it will be covered.
Ensuring you always have a place to stay
In the event that something has happened to a rental property that makes it no longer safe to stay in, a tenant is responsible for finding a new place to stay, and covering the associated costs. Tenant insurance will cover alternate accommodations, regardless of how long they need to vacate for, creating an additional support system for them during an incredibly stressful time.
Avoiding the stress of moving your belongings
During the restoration process a tenant may have to remove their belongings from the property. Tenant insurance covers the moving and packing of undamaged items, and the disposing of damaged ones. In this case, time is often of the essence to allow work to be completed, so tenant insurance can not only ensure this is done quickly, but also save the tenant the money and hassle of doing it themselves.
It’s not expensive
Unlike home insurance, tenant insurance is relatively inexpensive since it is only covering personal belongings rather than the property as a whole. On average it costs as little as a couple hundred dollars a year, and can often be bundled with car insurance to make it even cheaper. In the event of a disaster, it’s money well spent.
If you have a rental property that is hit by a disaster, the team at RCC DKI is here to help 24/7, 365 days a year. Our team can help you, and your tenants, through the process of getting everything cleaned up and restored, and getting everyone back home and back to normal. To find out more about our residential services, check out our website.