“Flood destroys a lower-level rental unit. Unfortunately, the tenants did not have insurance and lost everything.”
We have all seen these tragic stories on the news.
It’s a heart-wrenching situation that often plays out. Fortunately, there are options for people in rental situations that are extremely affordable and will protect them from unpredictable weather or catastrophic plumbing failures.
Renters’ insurance is easily accessible – around $15 per month. This policy will cover everything in your rental suite, from stereo equipment to bicycles to that enormous flat-screen television. However, never assume that your belongings are protected under their policy since you rent a space in someone’s home.
Doesn’t The Home Owner’s Policy Cover My Ground Level Rental?
The answer is no. As a renter, you must never assume that there is coverage based on the homeowner’s house insurance policy. If something were to happen in the rental suite by accident or otherwise, the insurer may turn around and declare the policy void since they may not have been notified of the secondary dwelling. Everything needs to be declared and documented for there to be coverage. Never allow your insurer to challenge your claim.
There are equally tragic scenarios for homeowners who may take it upon themselves to quickly develop a livable ground rental property in their home, only to be financially devastated when they attempt to file a claim against a flood or fire that originated in this ‘new’ residence. They tried to fly under the radar with this new rental revenue and paid dearly.
The homeowner MUST notify and declare any additional suites in their home.
The Inherent Risks Of Basement Apartments
Basement apartments offer an attractive revenue potential. However, they attract their level of risk, which often catches homeowners off guard.
Basement suites are literally renovated basements that may be partially located below ground level. They are highly susceptible to water, and flood damage as most will have had their drains covered by the updated flooring. Older buildings may not have the same level of foundation coating on the outside of the house, which can let in moisture through the concrete that is porous by nature. Storms can damage recessed windows, causing flood damage; ruptured pipes can pool water in the basement with nowhere to drain.
If The Home Owner Giving You The Runaround – Walk Away
Any new living situation requires some manner of insurance confirmation. Get it in writing ‘before’ you move in. If the homeowner seems resistant to investigating their policy, the suite is likely illegal and not compliant with building safety codes. You should most certainly avoid these situations at all costs.
We hope this was informative and will help you protect your new rental property or, as a renter, give you enough information to research and protect yourself and your belongings.
Contact Us
Do you have more questions? We’d be happy to hear them. Reach out to us today, and one of our friendly brokers will ensure you have the perfect tenants’ insurance policy and coverage.
