When your landlord customers suffer a fire or major water damage on their rental property, their tenants can’t live in their home until it’s repaired possibly leaving them without any rent coming in for months. But they still need to pay their rental mortgage, taxes and utility bills. Now it is possible for your clients to avoid all this financial stress with Rental value protection.
When their tenants are forced to live elsewhere momentarily
Natural catastrophes such as wildfires in Fort McMurray or in B.C. had forced hundreds of tenants to evacuate their homes.
And we all read stories in our local news of domestic fires in rented buildings, leaving tenants displaced like 15 tenants in Sudbury in November.
But major water damage – whether from high winds ripping off the roof or faulty plumbing – can also make a rental property inhabitable.
Avoid financial stress with the Rental Value protection
Weeks or even months of repairs to get a rental back to its original condition, with the tenants not paying your client rent as they had to relocate during the renovations can be a nightmare, especially if the mortgage is still due. Some banks will allow a landlord to skip one to four payments per year but it has some consequences. So they really need to think this through.
To avoid financial struggles, APRIL Canada can include Rental Value Protection within a Landlord insurance package. It will compensate your clients for the rent they can’t collect while their rental is uninhabitable because of insured damage.
Why your clients should ask their tenants to have their own insurance
While a major loss to your rented property is stressful for your client, the landlord; this is also nerve-racking for the tenants:
- They must find another place to live for a while. Renter insurance would cover their living expenses (such as renting an AirBnB or booking a hotel room) when a loss happens to their home.
- Their personal belongings have been damaged too. Renter insurance would compensate them so they can replace their clothes, furniture or other personal items; whereas landlord insurance would only protect their appliances and furniture.
- But more importantly, they might be responsible for the damage (e.g. they caused a kitchen fire). Renter insurance would pay, on their behalf, any compensatory damage or any other third party impacted by the property damage they caused.
Writing a clause in the lease making it mandatory for tenants to have their own insurance is very helpful. Every year, a landlord should ask for a copy of their renewal to make sure they maintain their coverage. This kind of requirement is easier to implement once you’ve established a good relationship with your tenants.
Facing the other consequence of a major loss
Traditional insurance companies might not renew a landlord’s policy if:
- The rental has been significantly damaged
- The claimant had multiple losses over the past few years
- The rented property has been unoccupied by tenants for several months due to the renovations
This is when it is good to turn to APRIL Landlord’s Insurance.