A cropped image of a landlord’s hands giving keys to the tenant

Top 5 Most Common Landlord Insurance Claims

Aug 20 2021

As a landlord, you are able to contribute positively to the lives of many. You offer a space where businesses can grow or a place for someone to call home. However, there are a number of risks that you face as well. You might worry about natural disasters, tenant-related property damage, tenant injuries occurring on the property, and more. 

This is where landlord insurance comes in. A comprehensive and personalized landlord insurance policy provides coverage for all of the above scenarios. In this article, we’ve compiled the most common landlord insurance claims so that you can see the full scope of coverage this insurance type offers. 

What Is Landlord Insurance? 

Landlord insurance is a type of insurance policy tailor-fit to address the risks faced by landlords of residential or commercial spaces. Landlord insurance is suitable for anyone who rents out any of the following:

  • Rooms in one’s own house
  • A condo unit or condotel
  • An apartment building or complex
  • An office space
  • A storefront
  • Other types of properties similar to the above

Landlord Insurance Coverage 

Landlord insurance protects you from financial loss by covering repair, replacement, medical, and/or legal costs associated with the following:

  1. The rental property is damaged due to a natural disaster, a tenant accident, or as a result of vandalism.
  2. You lose income because property damage (from the above causes) leaves the space uninhabitable, unusable, or inaccessible.
  3. Physical injuries or damage to tenant possessions occurred as a result of landlord negligence.
  4. The rental property is subjected to theft.

To give you a clearer idea of how the above scope of coverage will benefit your business, we’ve broken down a few examples of landlord insurance claims. 

Examples of Common Landlord Insurance Claims 

a firefighter fighting a house fire

1. Property Damage Due to Fire 

First on our list of common landlord insurance claims are those relating to fire. The amount of damage caused by the fire would depend on the fire classification and how quickly the incident was contained. 

On average, property restoration due to moderate fire damage would cost at least $2,000 to $6,000. But larger fires in a property can cost well over $40,000. If most of the property is destroyed by the fire, the cost can amount to even more. 

Similar to other landlord insurance claims, the amount covered in such an incident primarily depends on the coverage limit. This limit varies greatly depending on the needs of the landlord. If, for example, the coverage limit is up to $1 million, then the property repairs could be covered up to this amount. 

Aside from covering the property repairs, landlord insurance will also reimburse lost income while the property is uninhabitable. This should still be within the coverage limit.  

2. Accidental Tenant-Inflicted Property Damage 

Tenant accidents can happen. Depending on your agreement with your tenants, they may be able to shoulder small damages, whether it’s taken from their security deposit or some other similar arrangement. 

However, for more extensive damages, some tenants may not have the capacity to pay. Some of them may also not have renter insurance to cover the damage. In such cases, landlord insurance will be your source of funds for repair, up to the agreed coverage limit. 

The following are examples of accidental damage (by tenants) that can be triggers for landlord insurance claims. We’ve also included the estimated cost for each: 

  • A small explosion and/or a contained incident of fire – restoration costs are around $2,000 to $6,000. 
  • Blunt force damaging plumbing fixtures, leading to flooding – repairs total to around $2,500.
  • Unapproved DIY renovation leading to interior damage – repairs would be around $1,300.

3. Acts of Vandalism Inflicted Towards the Rental Property 

Any act of vandalism done to your property will be covered by a comprehensive landlord insurance policy, up to the coverage limit. Here are few examples of landlord insurance claims related to vandalism, along with their estimated costs:

  • Dug-up landscape – restoration could cost over $1,800.  
  • Graffiti – cleanup is around $500. 
  • Broken windows – major repairs would cost around $2,000.

Broken windows caused by vandalism, a common landlord insurance claim

4. Theft Towards the Rental Property 

If you have any equipment used for maintaining your rental property that gets stolen, landlord insurance covers this too. This is why cases of property such as stolen lawnmowers, snow removers, and ladders are valid landlord insurance claims. In such incidents, landlord insurance will cover the cost of replacement, up to the coverage limit. 

5. Legal Liabilities Due to Negligence  

Landlords are responsible for the maintenance of their rental properties so that it is safe and inhabitable. In line with this, legal liabilities can be incurred in instances such as:

  • Poorly lit stairs cause a tenant, a tenant’s guest, or a tenant’s customer (i.e third-party individuals) to suffer a fall and get injured.
  • A tile slightly out of place causes a third-party individual to trip and get injured.
  • A poorly installed or poorly maintained light fixture falls on a third-party individual and causes an injury.
  • Poorly maintained electrical wiring causes an incident of fire and damages tenant property.

The above examples can lead to lawsuits which, if taken through the litigation process, could cost $10,000 to $25,000 or more. In the above instances, landlord insurance can shoulder the medical, repair, replacement and/or legal costs, up to the coverage limit. 

How Much Does Landlord Insurance Cost? 

There are various factors that go into how much landlord insurance costs. These include the age of the property, the crime rate of the area, the presence of safety features on the property/space, and so on. 

For a deeper understanding of landlord insurance costs in Ontario, check out our article, “How Much Does Landlord Insurance Cost?

Landlord Insurance Tailor-Fit For Your Needs 

In this article, we’ve shown examples of common landlord insurance claims that show just how comprehensive landlord insurance can be. However, in order to have complete peace of mind, you need a landlord insurance plan that is completely tailor-fit for your needs. This is our specialty at KASE Insurance

We are an award-winning brokerage firm in Toronto, offering personalized insurance and dedicated assistance every step of the way, from negotiating premiums, to following up on landlord insurance claims. 

If you have further questions on landlord insurance or any kind of commercial insurance, get in touch with KASE Insurance today! We’ll be more than happy to share our insights and expertise.  

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