Why Every Landlord Needs Rental Property Insurance

Owning rental property comes with unique risks—from structural damage and liability claims to lost income when tenants can't occupy the unit. Standard home insurance often doesn’t cover these scenarios, leaving you exposed. Rental (landlord) property insurance safeguards your investment, giving you peace of mind and financial protection. Here’s why every landlord should make it a priority.

1. Protects Your Property from Major Risks

• Property Damage Coverage: Includes protection against fire, vandalism, storms, and other perils—not covered by standard home insurance.

• Includes building structures and any landlord-owned contents, not tenants’ belongings.

2. Liability Coverage for Injuries or Damages

• Covers legal liability if someone is injured on your property (common areas, entrance, etc.).

3. Loss of Rental Income Protection

• If your property becomes uninhabitable due to a covered loss (e.g., fire), this coverage helps recoup rent you’re unable to collect.

4. Includes Optional Add-ons

• Options like water damage, flood, sewer backup, or contents coverage for landlord-owned appliances can be added.

5. Costs Are Manageable and Tax-Deductible

• In Ontario, policies typically range from $800 to $2,500 per year for various property types.

• Canada-wide, basic coverage averages $40–80 per month (~$480–$960 per year), with median quotes around $1,325 a year.

• Landlord insurance premiums are often tax-deductible as rental expenses.
  
  

6. Commonly Required by Mortgage Lenders

• While not legally mandated, lenders often require landlord insurance before financing a rental property.

7. Avoids Gaps from Standard Home Insurance

• Standard homeowner policies don’t cover rental activities—landlord insurance fills that crucial coverage gap.

Final Summary

Rental property insurance is essential—covering property damage, liability claims, and loss of rental income. With affordable premiums and optional coverage additions, the protection far outweighs the cost. It’s not just a smart investment—it’s often required for financing and essential peace of mind.

Frequently Asked Questions

Q: How much is landlord insurance in Ontario?
Landlord insurance in Ontario typically costs between $800 and $2,500 per year, depending on property type—range includes condos, single-family homes, and multi-unit buildings.

Q: What is the best insurance for landlords?
The best landlord insurance provides coverage for property damage, liability, and rental income loss, plus optional add-ons like flood or sewer backup. Choose a provider offering customizable limits, transparent claims service, and solid reviews.

Q: How much is $300,000 in renters insurance?
Renters insurance coverage amounts like $300,000 refer to liability protection limits, not a cost. In Ontario, tenant (renters) insurance typically costs $15–$30 per month (about $180–$360/year).

Q: What is landlord insurance in Canada?
Landlord insurance is a specialized property and liability policy for rental owners. It covers structural damage, landlord-owned contents, legal liability, and lost rental income—not including tenants' personal items.

Q: Is landlord insurance mandatory in Ontario?
No, it is not legally mandatory in Ontario. However, mortgage lenders often require it, and it's highly recommended to protect your investment effectively.