Student occupied housing has become a popular addition to investment portfolios. As property values have increased they have taken in more personal equity. It is important to obtain proper coverage for this large financial endeavour and liability exposure.
Insurance companies have strict guidelines regarding rental properties occupied by students. A proper policy will state student occupied housing on the declaration page. Having a property insured as a single family rental and occupied by students would void coverage for the policy.
Under insurance policy wordings, each self contained unit (defined as having a separate entrance with its own cooking facilities) must not be occupied by more than two unrelated individuals. Even if a landlord obtains a lease for one individual, coverage will still be void, as it is the owner’s responsibility to determine who is occupying the property. Without proper coverage, property owners would be accountable for the cost of a claim arising from property damage or liability.
Student occupied housing is not offered by all insurance companies and in most cases is only offered under a commercial policy. The information needs to be accurate to ensure that the property is insured to value, age, square footage, construction type, updates to roof, electrical, plumbing and heating. With rented condos the landlord contents amount and improvements/betterments would need to be determined. For liability coverage the insurance company will request the number students and rooms rented at the location. Rental income is available for one year to cover property expenses in the event of a covered claim. Other coverage to consider is replacement cost on building/contents, tenant vandalism, and sewer back up. Providing accurate information will ensure there are no misconceptions at the time of a loss.
It is imperative that owners of student occupied housing purchase adequate coverage. Sutherland insurance can provide a comprehensive review of property investment portfolios to ensure proper coverage is in place. Please contact the office at 519-822-0160 or visit our website www.sutherlandinsurance.com for quotations or any other information.
Dave Menegotto, Account Executive, Registered Insurance Broker
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