Insurance Costs

We've renewed our insurance costs for 2010. Our provider is Peace Hills Insurance and they give us very competitive rates, excellent service and quick responses on any claims we file.

We watch our costs pretty tightly and noticed there was an increase in the premium this year. Our great broker explained that insurance companies generally increase the premium annually on a flat rate inflation percentage. Even in years where the properties aren't appreciating.

The spread between some companies is between 4% and 12% in the same year. So we asked if we could adjust our rate and were given the ok.

When you're dealing with a huge portfolio it could mean hundreds to thousands of dollars a year in savings. Of course you must ensure your property is never under-insured or over-insured.

Rental Properties and Insurance Coverage

If you've every played Cashflow you've probably got the "Natural Disaster/Toxic Pollution" card that wipes out your property unless you have an "All Risk Insurance" card and have been paying the $200 premium.

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In Canada property insurance is structured under three types:

Standard - protects against "named perils" including such things as fire, lightning, windstorm, hail, theft, and specific types of water damage.

Broad- is a level up from named perils and is called "all risk" this includes such things as faulty workmanship and some types of wear and tear.

Comprehensive - provides all risk coverage to the dwelling and the contents

If you're renting your property you want to avoid Comprehensive as the tenant is responsible for insuring their own belongings. Although we recommend all our tenants have this insurance.

As housing prices rise and fall you must make sure that your insurance covers your property at the current value. If your house has increased in value but your coverage is to an outdated limit you may not be completely reimbursed to the value your property holds. Check with your insurance agent to make sure the values are accurate.

Let your insurance agent know if you have vacant properties. If you don't inform them you may not be covered for some types of damage. It may cost you extra money as a "vacancy premium" is often charged. However, that is the beauty of insurance as a few hundred dollars could save you tens of thousands.

Our insurance brokers have an incredible track record with us. We've only had to use them a few times but they have been outstanding. As with any service provider make sure your insurance company will give you the best value and service possible.

More Canadian specific insurance information Click Here