Do you have your own insurance policy on your investment property that is a condominium townhouse or condominium high-rise? If not, you better think about adding your own policy.
I am not able to give legal advice or any expert advice on issues that don't relate to real estate, but please consider what I am saying below and consult with your own insurance company and condominium corporation. This advice below could prove to be very important or costly to you in the event of a problem in the future.
My thinking in the past was that since a condominium corporation has building insurance and since a tenant has contents insurance, then I don't need to buy insurance on my investment properties.
This is incorrect!
I just put insurance on all our investment properties There are many reasons for me to have an insurance policy on these rental investment properties.
Some reasons for me having insurance on our investment properties are as follows.
- I am now covered if the condominium insurance does not cover water damage or roof damage or any other damage such as water, ice, snow or sleet damage on the interior or exterior of the unit
- If the condominium insurance company attempts to claim money from me for damage caused by our tenant then I am covered.
- If the condominium insurance does not cover the entire loss and comes after me to pay for part or all of their loss then I am covered
- If a tenant causes a problem, such as plugging a drain line, that causes damage outside of the unit and the condominium corporation comes after the tenant or me to pay for those repairs, I am now covered.
- If the tenants insurance does not cover damage that the tenant causes inside the unit, my insurance may now cover that damage.
- If the tenant lets their insurance policy lapse, then at least I am covered in the event of a loss caused by the tenant.
- In the event that the tenant has to leave the unit for some reason and I'm losing rent, such as repairs after a major fire or flood inside the unit, then I am now covered for up to 1 year rental loss while the unit is being repaired.
- There are other endorsements in the insurance policy that I now have that cover us for many other situations, but these items above seem to be the major potential problem issues.
The annual cost to me is about $100 per property.
These are some of the major reasons for me to have insurance on all our investment properties and I would recommend that you look into obtaining insurance on all of your investment properties too.
I wish you all the best!