Renting your property out to a tenant can be risky business. The tenant might look perfect on paper, have a good job, no criminal record – and yet they have a terrible tendency of leaving the hob on or breaking things. Unfortunately, a tenant is highly unlikely to reveal such homebound vices to a landlord, so there’s always a bit of a trust game in play.
Two of the biggest exposures landlords face are: tenants not paying their rent and the rental property being damaged by tenants’ negligence or malicious acts like theft and vandalism. Oftentimes, landlords rely on their own savings to cover such expenses.
Leading MGA APRIL Canada has launched an alternative solution so that landlords aren’t left out-of-pocket for their tenants’ negligence. APRIL Canada’s Landlord Protection product is a comprehensive insurance solution, currently available in Ontario and Quebec. It was born out of APRIL’s expertise in the rental sector, explained Lucie Lee Frappier, residential team leader at APRIL Canada.
“The Landlord Protection is an unprecedented insurance that covers unpaid rents and damage by tenants for Ontario and Quebec landlords on top of our traditional property and liability package,” Frappier said. “For example, the unpaid rents protection is much more than just insurance in the event of rent arrears; it also includes coverage if the tenant dies, leaves before the end of the rental agreement without respecting the proper notice, damages the property to the point that it’s not tenantable for more than a week or refuses to vacate the rental despite the eviction notice.”
Common claims that crop up for landlords often revolve around negligent or forgetful tenants, according to Frappier. For example, a tenant might leave the bath running or leave a frying pan unattended, which could cause serious damage to an insured’s property and the surroundings. There are tips brokers can give to their landlord clients to help them mitigate against such risks.
“Brokers can advise landlord clients to carefully screen their tenants. At a minimum, they should check their credit score, and if possible, they should do a more thorough background check with specialized companies,” Frappier told Insurance Business. “Landlords can also oblige tenants get their own renters insurance. That way, if they are legally liable to property damage, subrogation could be explored.
“It’s also a good idea for landlords to visit the interior and exterior of their rental property at least two to four times a year in order to avoid any bad surprises at the end of a lease. Finally, brokers should advise landlord clients to be proactive. If a tenant doesn’t pay rent, start the eviction process as soon as possible. It could always be interrupted if the tenant pays the rent arrears.”