The main difference between builders insurance and landlord insurance is that buildings insurance is a form of home insurance that protects against structural damage and landlord insurance is a specialized type for landlords. While these kinds of insurance overlap slightly in terms of protection related to structural damage, the similarities end there.
In this complete guide we will compare buildings insurance vs landlord insurance so that you’ll be able to decide what the best choice is for you in terms of managing risks.
Let’s begin!
What Is Buildings Insurance?
Buildings insurance, also known as building insurance or dwelling coverage, falls under home insurance. This type covers structural damage sustained by the property. Essentially, this type of insurance covers the cost of rebuilding the structure in the event that it is damaged by fire, vandalism, fallen trees, and so on.
Buildings insurance can either be bundled with contents insurance (which provides coverage for the possessions within the house), or it can be a standalone policy. Either way, buildings insurance is sometimes required with a mortgage.
What Is Landlord Insurance?
Landlord insurance is a specialized type of insurance for landlords. It offers a broad scope of coverage which includes structural damage to the rental property—among other coverage points that landlords need. Landlord insurance can also be set up for multiple rental properties.
Although landlord insurance isn’t legally required in Canada, many property owners opt for this type of insurance to avoid financial loss due to various perils. In addition, landlords of residential rental properties are not the only ones who can get this kind of insurance. Owners of commercial spaces can also opt for landlord insurance.
The Coverage of Buildings Insurance vs Landlord Insurance
Here is a quick comparison of buildings insurance vs landlord insurance in terms of coverage:
| Incident | Buildings Insurance | Landlord Insurance |
| Property damage due to fire, lightning, wind, hail, and so on | Covered | Covered |
| Property damage due to vandalism or burglary | Covered, unless excluded | Can be added |
| Loss of landlord income | X | Covered |
| Damage to equipment used for rental property upkeep | X | Covered |
| Landlord liability | X | Covered |
Now, let’s go over the above incidents and how they are covered by their corresponding insurance type(s).
1. Property Damage
Both landlord insurance and buildings insurance shoulder structural damage to the property. A few examples of covered perils include fire, lightning, wind, and hail. However, the list of covered perils can vary from policy to policy.
Additionally, most landlord insurance and buildings insurance policies cover detached structures like garages or sheds.
2. Vandalism and Burglary
Vandalism and burglary damage are usually covered in buildings insurance. As for landlord insurance, it can be customized to also include these types of property damage.
For both types of insurance, replacement of lost items due to theft is typically not covered. However, when landlord insurance is customized to include burglary, the replacement of equipment necessary to maintain the rental property can be covered.
3. Loss of Landlord Income
Landlord income protection is solely under landlord insurance. It can be claimed if the rental property or properties sustain damage from a covered peril.
In such an event, the rental property may be so damaged that tenants would be forced out. Furthermore, tenants may not be able to return until repairs are completed. When this happens, landlord insurance will reimburse lost income while also covering the repairs, as mentioned earlier.
4. Damage to Equipment for Rental Property Upkeep
Damage to equipment used for the upkeep of the rental property is also covered by landlord insurance. This would include equipment like lawnmowers, snowblowers, and the like. Typically, wear and tear is not a covered cause of damage. However, accidental damage (e.g. fire) or damage from named natural disasters would be covered.
5. Landlord Liability
Landlord liability is also covered by landlord insurance. In case the landlord is liable for injuries sustained by tenants, their guests, and other members of the general public, landlord insurance will shoulder medical bills as well as legal expenses.
The Cost of Buildings Insurance vs Landlord Insurance
Because landlord insurance covers much more than just structural damage of a rental property, it typically costs more than buildings insurance or home/homeowners insurance.
Numerous factors can affect how much the premium of landlord insurance or buildings insurance will be—but the price difference between the two is around 25%.
If you’re interested in getting landlord insurance to secure your rental properties, get a quick quote here. You can also learn more about landlord insurance costs by checking out our article, How Much Does Landlord Insurance Cost In Ontario?
Which Type of Insurance Is for Me?
Neither landlord insurance nor buildings insurance is compulsory for landlords. Therefore, choosing between the two depends entirely on your preferences and needs. For optimum protection against a wide range of risks that landlords face, we recommend landlord insurance.
Another factor to note is that buildings insurance is not designed to cover property damage resulting from a tenant’s errors (e.g. accidentally leaving a pot on an ignited stove and starting a fire). This could result in complications while filing a claim. If you’re worried about this, we suggest speaking to your insurance provider and clarifying whether tenant-related damage would be covered.
Talk to an Expert From One of Canada’s Most Trusted Insurance Firms
This wraps up our article on the differences between buildings insurance and landlord insurance. If you have further questions about landlord insurance, we’re here for you.
KASE Insurance is a Toronto-based insurance brokerage firm that specializes in customized insurance policies. Whether you manage one or more residential/commercial rental properties, we can put together a landlord insurance plan that fits your needs. Our dedicated team will provide you with expert insights and assist you at every stage of your insurance journey—from negotiating premiums to following up on claims.
We offer the most hassle-free insurance experience yet. Contact us today to learn more!
