Revenue Property Insurance

[sa226]

Full disclosure: I'm an insurance troglodyte.

I didn't quite realize how complicated this stuff and due to my situation, it is that much more. I understand the reasoning, but I can't be the first person to have done this.

Situation:
-I own a one bedroom condo, it is turning into revenue property (rental) as of September 1st. It is currently my principal residence.

-The SO and I have been house shopping for a few months with no success. She has a place she is renting.

-The plan was to take advantage of the summer rental market and get my place rented then move in to her place while we house hunt. So far step one is complete.

-Now the insurance company is saying that in order to have revenue property insurance, I need a policy on a principal residence. (I understand. that makes sense....kind of) With the initial plan of being in principal residence "limbo" This is a bit of a headache. They're asking questions about amperage, plumbing (For the principal residence) etc etc.

My questions are: Is there any sort of "let" in this situation? I can't be the first person to do this. Is owners insurance required for a revenue property?(Please don't freak out over this question) The tenant will have contents and liability insurance and the condo corp has insurance. What sort of things does insurance for a revenue property cover?

Also side question, what is the ball park cost for insurance on a revenue property that is a small one bedroom condo in an apartment complex? The basic quote seemed really high.

thanks y'all

[GoinAllTheWay]

Originally Posted by sa226

Full disclosure: I'm an insurance troglodyte.

Sure hope I'm not the only one that had to google that.

Insuring a rented condo has to be one of the easiest/low risk things to do as far as insurance goes.

Yes, some insurers will want your primary property too (offset a "bad risk" with a good one) but plenty out there will do a standalone, especially a condo. Wawanesa does this for sure.

Do you NEED insurance? Well, certainly not as much as you would with a standalone detached house. Reason for it being is the liability protection. Plus you can have your rental income insured as well. Meaning if your tenants were forced out due to an insurable claim, they will pay you your rental income for a "reasonable time frame" usually the estimated time it takes to do repairs.

Last is landlord contents. This is usually minimal, say $5000 for the major appliances.

Do you NEED it? Well, no, not really. Is it a good idea? Yep, for the liability alone. These policies usually are only $200-$300/yr so why not?

I'm honestly a little surprised you are having a tough time finding someone to do this for you. Like I said, Wawanesa will do it for sure. Intact likely would too to at least the next renewal.

[sa226]

Haha. I only know the word from its use on here.

Thanks, I think I will seek out alternative insurers. These guys have been really good to me so I turned to them first. But the headache for a short term solution, seems unnecessary.

[loob job]

I have a rental property, a small 520 s.f. condo. You have to insure everything from the walls in. I think the minimum was $25k which includes all the appliances, flooring, painting, drywall, electrical, liablility, etc. You get the picture. It cost me $330. Shop around a bit, I had a quote for $330 and another for $500, I'd rather that $170 difference be in my pocket than theirs.

[Winsor_Pilates]

I also recommend requiring that your tenant will have insurance; put it in your lease agreement.

[calgarygeologist]

Originally Posted by sa226

Full disclosure: I'm an insurance troglodyte.

I didn't quite realize how complicated this stuff and due to my situation, it is that much more. I understand the reasoning, but I can't be the first person to have done this.

Situation:
-I own a one bedroom condo, it is turning into revenue property (rental) as of September 1st. It is currently my principal residence.

-The SO and I have been house shopping for a few months with no success. She has a place she is renting.

-The plan was to take advantage of the summer rental market and get my place rented then move in to her place while we house hunt. So far step one is complete.

-Now the insurance company is saying that in order to have revenue property insurance, I need a policy on a principal residence. (I understand. that makes sense....kind of) With the initial plan of being in principal residence "limbo" This is a bit of a headache. They're asking questions about amperage, plumbing (For the principal residence) etc etc.

My questions are: Is there any sort of "let" in this situation? I can't be the first person to do this. Is owners insurance required for a revenue property?(Please don't freak out over this question) The tenant will have contents and liability insurance and the condo corp has insurance. What sort of things does insurance for a revenue property cover?

Also side question, what is the ball park cost for insurance on a revenue property that is a small one bedroom condo in an apartment complex? The basic quote seemed really high.

thanks y'all

If you have a mortgage on this property you will need insurance. Your lender will require it.

It should be easy to acquire from most insurance companies. I have a policy with TD Meloche Monnex and had no problem getting coverage without having any other home owner policies. As others mentioned, it is cheap stuff. I pay $20-something per month.

[PostandIn]

Originally Posted by Winsor_Pilates

I also recommend requiring that your tenant will have insurance; put it in your lease agreement.

^ This is so important. You insure the physical rental space, the furnishings (if any), appliances plus electrical and mechanical systems.

The tenant must have tenants / renters insurance to cover you in the event of their 'misadventures'.

It's helpful to be knowledgeable in the Rental Tenancies Act http://www.qp.alberta.ca/documents/Acts/R17P1.pdf.

And, the Landlord Course is also valuable:

http://www.edmonton.ca/programs_serv...se%20Dates.pdf

I'm sure the same course is available in Calgary.

[GoinAllTheWay]

Originally Posted by calgarygeologist

If you have a mortgage on this property you will need insurance. Your lender will require it.

Not in the case of a condo. The condo board holds the master policy. If proof of insurance is required, it's obtained from the condo board in the form of an insurance certificate.

[bizaro86]

I've had mortgage lender demand my own insurance, and another at the same bank be satisfied with the condo board's insurance. I think it mostly depends on the education of the underwriter.

I still recommend it, primarily for liability. I had a condo board change the deductible on their policy to 30k without telling the owners. Then my tenants alledgesly left a window open, bursting a pipe, damaging the three suites below.

I had required tenants have insurance, which they had. But the condo board refused to deal with their insurance company, and put a lien on my property. My insurance company eventually paid 25k, which was the limit on my policy. I had to pay the deductible and the 5k overage.

There was some discussion of going after the tenants insurance to pay, but nothing ever came of it.

[sa226]

Originally Posted by calgarygeologist

If you have a mortgage on this property you will need insurance. Your lender will require it.

It should be easy to acquire from most insurance companies. I have a policy with TD Meloche Monnex and had no problem getting coverage without having any other home owner policies. As others mentioned, it is cheap stuff. I pay $20-something per month.

Thanks.

Though as I have been calling around, "no problem getting coverage" is not exactly my experience. I have called 4 brokerages now and have been met by "Hmmm, well....ummm, it would be much easier to just convert your current policy, we don't really do that."

Only one brokerage has taken my info to Wawanesa for a quote.

We'll see what they come back with.

In most cases, those that have been helpful have said that it would be cheaper to take out the principle policy, be it tenants insurance or whatever, rather than the standalone. But if we're talking the difference of a few dollars a month I would rather just do the standalone now and then streamline the policies in a year or so when things are a little more clear on the whole living situation thing.

Maybe my ignorance is showing, but that seems easier to me.

[calgarygeologist]

Originally Posted by GoinAllTheWay

Not in the case of a condo. The condo board holds the master policy. If proof of insurance is required, it's obtained from the condo board in the form of an insurance certificate.

Originally Posted by bizaro86

I've had mortgage lender demand my own insurance, and another at the same bank be satisfied with the condo board's insurance. I think it mostly depends on the education of the underwriter.

I still recommend it, primarily for liability. I had a condo board change the deductible on their policy to 30k without telling the owners. Then my tenants alledgesly left a window open, bursting a pipe, damaging the three suites below.

Just like bizaro, my mortgage lender required both the condo board insurance and my own insurance as conditions for financing.

[GoinAllTheWay]

Did they just want a copy of your policy or did they want to be listed as an interested party like on a homeowners policy?

[sa226]

Originally Posted by bizaro86

I've had mortgage lender demand my own insurance, and another at the same bank be satisfied with the condo board's insurance. I think it mostly depends on the education of the underwriter.

I still recommend it, primarily for liability. I had a condo board change the deductible on their policy to 30k without telling the owners. Then my tenants alledgesly left a window open, bursting a pipe, damaging the three suites below.

I had required tenants have insurance, which they had. But the condo board refused to deal with their insurance company, and put a lien on my property. My insurance company eventually paid 25k, which was the limit on my policy. I had to pay the deductible and the 5k overage.

There was some discussion of going after the tenants insurance to pay, but nothing ever came of it.

Thats comforting.

Yes my tenant will have insurance, its a requirement of the Condo board.

So I finally received a quote from Wawanesa for 173$ a year. Which I find hilarious. In my quote search I have received everything from 700$ a year to "Uh, no we don't do that." Yet in the span of 10 minutes Wawanesa came back with 14 dollars a month.

Thanks for the input everyone.

[bizaro86]

Originally Posted by sa226

Thats comforting.

Yes my tenant will have insurance, its a requirement of the Condo board.

So I finally received a quote from Wawanesa for 173$ a year. Which I find hilarious. In my quote search I have received everything from 700$ a year to "Uh, no we don't do that." Yet in the span of 10 minutes Wawanesa came back with 14 dollars a month.

Thanks for the input everyone.

Wawanesa was who paid out the $25k for me.

[I-Hate-Hulse]

Originally Posted by bizaro86

There was some discussion of going after the tenants insurance to pay, but nothing ever came of it.

I'd be surprised if your insurance company who responded and paid out your claim didn't go after your tenant's insurance to pay them in turn (a process called subrogation)

I'm bit late to the party but I went through a similar situation and can confirm that TD and Aviva will not insure a standalone rental without a primary homeowner policy. Aviva actually bound coverage for me but figured out a year later that I lacked a primary policy and fired me as a customer immediately.

Another good reason to get condo insurance as a landlord - if you unit becomes unlivable (ie a flood), you can get your lost rent covered by insurance.

At the time I found this article useful in understanding why condo insurance was important. It's written more in terms of a condo owners living in a unit vs a landlord but the liability issues were still relevant:

http://www.stratasense.ca/own01---in...et-it-now.html