What Insurance Do You Need for a Cottage or Rental Property?
When you own and live in a cottage as your private residence or a vacation home, homeowners insurance is a good idea. Does the same insurance cover you if you turn your cottage into a rental property?
Even when offering your cottage as a short-term rental that you also use throughout the year, you become more than a homeowner. You're a landlord! Rental properties require different insurance to protect rental income and damages that can occur when letting others use your cottage.
What kind of insurance do you need? Keep reading to learn more about insurance for a cottage or rental property.
Homeowners Insurance Might Not Be Enough
Your homeowner's insurance policy covers you and your home when you are the primary resident. In most cases, a standard homeowners policy doesn't extend to activity that occurs when renters occupy your cottage.
To protect you from the liabilities that come with being a landlord, you also need landlord insurance to cover rental activities. Your cottage becomes an income source when you turn it into a rental. As an income-generator, you now have a business that needs different protections than a private residence.
Landlord Insurance Covers More
Anything can (and might) happen when you rent your home to people you don't know. Accidents happen, but sometimes renters cause intentional damage that can require expensive out-of-pocket repairs without the right coverage.
Adding landlord insurance to your coverage gives you the additional protection you need to protect your income when things go wrong with your cottage rental property. With landlord insurance, you have coverage for:
- Property damage. Your policy can include coverage for a range of perils, including basic fire, wind and hail coverage.
- Rental income default. Owning a cottage as a rental property isn't a good investment if you can't collect the rent. If your property becomes uninhabitable from damage or other problems, default protection provides short-term compensation for rent you would have collected if a tenant was paying the rent.
- Liability. If a tenant becomes injured while living on your property, you could be held liable. Landlord liability insurance helps protects you from a lawsuit.
Rental dwelling insurance coverages can vary depending on your needs and the policy you choose.
You never know when something could go wrong or what that problem could be. Make sure you find a policy that minimizes your financial risks when owning a cottage as a rental.
Find the Best Insurance For a Cottage or Rental Property
When it's time for insurance for a cottage or rental property, we're here to help! The insurance brokers at Hillis Insurance Agencies Ltd. can assess your needs and help you find the right insurance policies to protect your investment property in Winnipeg and Manitoba. Contact us to learn more!