If you are renting out a property that you own, are you required to obtain fire insurance?
May 11th, 2010
The property is located in British Columbia, Canada, but I was wondering in general if there is ever a requirement for owners to have fire insurance before they are permitted to rent the property.
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if i owned a house i would insure it to the max
Legally, no. By contract? Maybe.
If you’re using a real estate agent, then they will require you to have property insurance, AND liability insurance, on that property, that you want them to manage.
If there’s a LOAN on the property, then your contract with the bank will require you to carry property insurance.
But if you’re managing it yourself, and there’s no loan, then you don’t have to insure it. If the place burns down or tenants vandalize it, though, there isn’t any coverage, of course.
There is no provincial statute or municipal by-law anywhere that states a property owner must be insured. If there is a mortgage on the property I can guarantee you that there is a clause stating that insurance for the full replacement value at all times. However whether there is a mortgage or not it would be extremely prudent to be insured, unless ou are so financially secure that you could afford to spend several hundred thousands to tear down the remainder of the dwelling, have the debris removed and then rebuild the house, all the while receiving no rental income, and not even notice it in your bank account? Along with replacing the dwelling itself there is also the liability aspect to consider. What if the tenant is injured due to a defect that you failed to rectify. Whether you are liable or not lawyers charge quite a king’s ransom to go to trial. Are you prepapred to pay for that as well as any judgement awarded against you?