Under-insured house can spell ruin

gold-insurance1207re03With more people renting out basement units, not having the right kind of property insurance becomes a bigger issue. Here’s an article from the Globe with some information – and it’s not even from an insurance broker!

You’ve purchased the coveted house, you’ve converted the old cellar into a basement suite and maybe even gone the extra mile with radiant-heat floors in the bathroom and a gas fireplace in the living room.

After a thorough search for the perfect tenant or tenants, you sign the lease, collect the damage deposit and sit back and start collecting the monthly rent that will go toward paying down your mortgage. But hang on – what about obtaining documentation that your tenants have paid for their own property insurance? If you’re like most homeowner-landlords, you probably haven’t gone to the bother.

Don Campbell, president of the Real Estate Investment Network (REIN), usually gets asked to forecast housing markets. However, that shouldn’t be a homeowner’s most pressing worry, he says.

“Due to the large number of people who are buying investment properties, or renting out their basement suites, a lot of untrained landlords are hitting the market and the biggest risk they are putting themselves in has nothing to do with which direction the average selling price is going. It is having the completely wrong property insurance,” says Mr. Campbell.

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