Investing in a student rental property can be rewarding, but it comes with unique challenges—especially when it comes to insurance. Even experienced landlords sometimes purchase properties that are difficult to insure due to outdated systems or structural issues. To avoid this, it’s essential to know what to look for before making an offer on your next student rental. Below are key factors that can help you reduce insurance costs and make insuring your property more straightforward.
1. Electrical System: Avoid Hidden Hazards
Modern building codes require homes to have copper wiring and a minimum 100-amp breaker service. In cities like London or Guelph, many older homes built in the 1970s or earlier may still have aluminum wiring. While some insurers may cover aluminum wiring under homeowners’ policies, student rentals with outdated electrical systems will severely limit your choice of insurers and likely increase your premiums.
Key Recommendations:
- Copper wiring: A must for most insurers.
- Aluminum wiring: Even if “pigtailed” by an electrician, it can still pose a challenge to insurers.
- Knob-and-tube wiring: Most insurers will outright decline coverage for student rentals with knob-and-tube wiring.
When purchasing a student rental, ask your broker to verify whether your electrical system meets insurance requirements. Upgrading to copper wiring before renting to students will help you access better insurance rates.
2. Heating System: Stick to Gas for Lower Premiums
Most insurers prefer properties with gas furnaces or permanent electric heating since they are efficient and reliable. If your property has heating systems powered by oil or other fuels, your options for student rental insurance will shrink, and you’ll likely face higher premiums.
To keep your insurance costs low and attract more coverage options, consider upgrading to a gas furnace or a comparable modern heating system.
3. Plumbing System: Prevent Water Damage Risks
Homes with copper or plastic plumbing are widely accepted by student rental insurers. However, older properties may have lead or cast iron pipes, which are more prone to leaks and bursting. While you may still obtain coverage with these systems, many insurers will only provide coverage on a named perils form, which does not include any coverage for water damage, leaving you vulnerable to expensive repairs.
Tip:
- If the house has lead or cast iron plumbing, consider replacing it to avoid water related problems.
Upgrading plumbing not only makes the property more insurable but also reduces the risk of expensive repairs down the road.
4. Roof Condition: Protect Your Property and Your Policy
An updated roof offers more than just curb appeal—it ensures better protection from weather-related damage and helps you avoid costly repairs that insurance won’t cover. Most insurance policies exclude water damage caused by poorly maintained roofs, meaning if water seeps in through damaged shingles, you’ll have to cover the repair costs yourself.
Insurer-friendly roofing tips:
- Make sure the roof is in good condition to avoid claims being denied.
- If needed, update the roof before renting to students to attract more favorable insurance rates or avoid having the roof excluded outright.
A well-maintained roof will reduce long-term maintenance costs and make your property more appealing to both tenants and insurers.
Final Thoughts
When buying a student rental property, ensuring that key systems—like electrical, heating, plumbing, and roofing—are up to date will make the process of getting student rental house insurance much easier. Upgrades may require some upfront investment, but they can pay off in lower premiums and fewer maintenance headaches in the future. Making your Student Rental Investments pay off in the long term.
Don’t forget to discuss all property details with your insurance broker and make sure they know if you plan to make any upgrades after purchasing the property. This way, you can get the right coverage at the best possible price.
This article was originally published on September 12th 2014 and updated on October 16th 2024