# Home Insurance + Tenants



## KaeJS (Sep 28, 2010)

I'm trying to get Home Insurance.

I've been having difficulty finding an insurer who will allow me to qualify under their insurance when I have tenants in the home.

I have a 3 bedroom home for which I would like to live in the basement and rent out the 3 rooms on the top level.

Allstate Insurance, for instance, said I can rent out the basement and it is okay to have "one" friend live with me in "one" room. But that I wouldn't qualify for more than that.

What do I do? Where do I go for insurance?

This is getting hectic. For those of you that rent out your houses, what is your strategy? Do you even notify the insurance company of your tenants?


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## Chris L (Nov 16, 2011)

Always notify your insurance agent of the use of the property. What's the point of insurance if it can't be used in a claim? Use of building can void your right to claim. 

Email Cam Gurthrie at [email protected]. He's located in Guelph and knows a crap load about rental insurance and is a broker himself so might be able to get you insurance. He's spoken a few times at our real estate investment club and is a local city Councillor. Tell him a guy from TREA sent you.


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## KaeJS (Sep 28, 2010)

^ Chris, thank you.

I will give him a call tomorrow.


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## marina628 (Dec 14, 2010)

I only have single family homes but if you hit a road block maybe prepare to rent basement and one room and you live upstairs.I am sure there must be some way to get insurance ,so many student housing out there.


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## Cal (Jun 17, 2009)

Can't you ensure that your tenants have tenant insurance. Would this help with you obtaining insurance as well.


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## KaeJS (Sep 28, 2010)

I have called more insurance companies and I am beginning to think people are just "taking the risk".

I have seen many homes where the basement and all the rooms upstairs are rented. Surely, there is no insurance for that.

Cal, if I understand it correctly, the tenant insurance won't help me obtain insurance for my home, but only protect me in the event that a tenant set my house on fire, etc, as their insurance company would pay for damages. The problem with tenant insurance is that most tenants do not have it or want to get it (extra expense), so it increases your vacancy rate.


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## KaeJS (Sep 28, 2010)

I have a question:

Say a tenant is in my home and that tenant does not have tenant insurance. If this tenant burns down my home while I'm at work, can I sue this tenant for damages?

(not sure where I would get the money from... "Can't get blood from a stone") just curious.


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## Spudd (Oct 11, 2011)

Tenant insurance only covers the tenant's belongings, not your house. The assumption is that the landlord has insurance to cover the house. 

If it were actually provable that the tenant had maliciously caused the fire (doubtful) then I would think you could sue him for damages. But if it was an accident, I would think not. Since accidental burnings are covered by home insurance it seems unlikely that you can sue an individual for them. (Note: not an expert on this, just using my experience and common sense.)

I googled and found this thread on another forum that might be helpful (and discouraging):
http://urbantoronto.ca/forum/showthread.php/17701-Rental-property-home-insurance

I also found these companies that may provide the insurance you're looking for:
https://www.cowangroup.ca/cigl/page...programs/student-rooming-house-program_en.jsf
https://www.intactinsurance.com/non-standard-ontario.html

I found the above by googling "rooming house home insurance". 

An alternative solution would be to rent out the top part of the house as a package deal. Is the basement a self-contained apartment or would you need to go upstairs for the kitchen? If it's self-contained then I would think you could rent out the upper level to a family or a group of roommates, but if it's billed as a 3-bedroom unit I suspect it would be more insurable than trying to rent each room separately.


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## MoneyGal (Apr 24, 2009)

What Spudd said in a very generous and informative post. ^^

Kae, you should probably spend some time learning a bit more about home insurance and commercial insurance. You can start at the website of the Insurance Bureau of Canada, here: http://www.ibc.ca/en/Home_Insurance/Home_Insurance_Explained/Home_Rental.asp

Also, FWIW, you would be operating a rooming house (not a boarding house, which includes meals) according to the bylaws in effect in Cambridge: http://www.cambridge.ca/byLaws/04-181 Building & Property Standards By-law.pdf

So you are going to want commercial rooming house insurance.


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## blin10 (Jun 27, 2011)

sorry a little off topic but i'm just curious true or fouls?, a friend of mine owns few houses and in one house his kid lives there with a gf (he does not rent it out), he said he still had to get rental insurance, how is that possible?


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## MoneyGal (Apr 24, 2009)

Non-owner-occupied. "Tenant" means an occupant who is not an owner, whether or not any money changes hands. Strictly speaking he got tenant's insurance, not "renter's" insurance; but both terms are used interchangeably.


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## blin10 (Jun 27, 2011)

but it's his house and it's his family why does he need to get tenant insurance, can't he just get a normal insurance ? i wonder how much more do you think tenant insurance is vs a regular one?


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## MoneyGal (Apr 24, 2009)

OK, I am not sure I understand your original question. If you live in a home of which you are the owner, you get homeowners' insurance. If you live in a home of which you are NOT the owner (leaving aside complicated spousal issues for the time being, i.e., who is specifically on title etc.), you get tenants' insurance. 

Tenants' insurance is usually much LESS than homeowners' insurance, because it covers only the property on-site, not the building itself.


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## peterk (May 16, 2010)

Blin, I'm assuming you mean: He has to get home insurance as if the building was a rental unit, even though his kid lives in the place. Correct?

If so, why wouldn't he? He doesn't live in the house. Why would "renting" it to your own family make any difference to the risk of the house burning down than if you rented it on the open market?


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## Four Pillars (Apr 5, 2009)

peterk said:


> Blin, I'm assuming you mean: He has to get home insurance as if the building was a rental unit, even though his kid lives in the place. Correct?
> 
> If so, why wouldn't he? He doesn't live in the house. Why would "renting" it to your own family make any difference to the risk of the house burning down than if you rented it on the open market?


Agreed. Insurance companies look at scenarios in a very simple black and white manner. For residential insurance, either the owner (person on title) lives in the house (normal house insurance) or they don't (rental/commercial insurance). There is no inbetween.

If the owner isn't living there, any connections betweens the occupants and the owner are meaningless to the insurance company. This might not be fair for every situation, but it would cost the insurance company more money to try to sort out different rates for different amounts of "connection" between the occupants and the owner.


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## MoneyGal (Apr 24, 2009)

Hmmm. I suspect related tenants might be MORE likely to collude to attempt to run an insurance scam. :biggrin:


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## Four Pillars (Apr 5, 2009)

MoneyGal said:


> Hmmm. I suspect related tenants might be MORE likely to collude to attempt to run an insurance scam. :biggrin:


Haha - good point. If that was the case, related renters might get a higher insurance premium compared to unrelated renters.

Best to leave well enough alone.


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## rikk (May 28, 2012)

KaeJS said:


> I'm trying to get Home Insurance.
> 
> I've been having difficulty finding an insurer who will allow me to qualify under their insurance when I have tenants in the home.
> 
> I have a 3 bedroom home for which I would like to live in the basement and rent out the 3 rooms on the top level.


I'm with Dominion ... to rent to non-family, the additional cost _was_ $20 per renter ... that was 2 years ago.


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## KaeJS (Sep 28, 2010)

This whole thing is ridiculously complicated.

According to "The Co-operators" Insurance Company...

Apparently, the reason I cannot get insurance to cover myself and the renters is due to the fact that my condominium corporation does not cover roofing, windows, or the outside of my home. But, they told me if the condo corp DID cover the outside of my home, it would be no problem at all...

It seems like this whole thing is just wishy washy and I'm getting stressed out because I need to have this all finalized and my waiver signed and sent by tomorrow.


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## KaeJS (Sep 28, 2010)

Chris,

I spoke with Cam on the phone today. He is a very professional, clear spoken, friendly, and comforting person to deal with.

I learned a lot from Cam and he really knows his material. Thank you.


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## Chris L (Nov 16, 2011)

KaeJS said:


> Chris,
> 
> I spoke with Cam on the phone today. He is a very professional, clear spoken, friendly, and comforting person to deal with.
> 
> I learned a lot from Cam and he really knows his material. Thank you.



Just glad to help. Hopefully you get things all worked out!


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## Cal (Jun 17, 2009)

So b/c it is not a freehold townhome, the ins co has an issue regarding the condo corp 's coverage/responsibility.


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## Mall Guy (Sep 14, 2011)

KaeJS - now I don't pretended to know the rental rates for a three bedroom house in Cambridge, but wouldn't it be simpler to rent the upstairs to one family, and live downstairs instead of renting each bedroom individually? As well, every condo I have ever had covered everything outside, and I was responsible for everything inside. It doesn't make sense to me . . . what if a fire wipes out three units, and one person didn't have insure, who rebuilds? Now if is maintenance/replacement of the roof/windows/etc, I could see that as normal, and shouldn't affect your insurance. I currently have a "condo" policy that cover the upgrade beyond the "builder's standards".


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## OhGreatGuru (May 24, 2009)

I suspect the reference to "rental insurance" is the class of insurance policy he requires, regardless of whether or not he is collecting an economic rent. It is not his principal residence, nor is it a secondary residence (such as a cottage) that is not lent out to others. So it doesn't qualify for "Homeowner's Insurance", which would have a lower rate structure. From the insurance company's point of view the risk is similar to a rental property, even if he is charging no rent.


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## Ag Driver (Dec 13, 2012)

KaeJS -- Rather than starting my own thread, I will piggy back on yours. I am curious what the final conclusion was.

I am purchasing a detached, single family home, and I plan on renting 2 rooms, while I occupy the master bedroom. I am going through the process of getting house insurance and I am running into the same dilemma. I have only gone through belairedirect so far, and they are telling me that they do not allow renters. Feel free to PM if you feel it is necessary. 

Input from the crowd is welcome!

EDIT: I have got in touch with TD Home Insurance, and they do in fact cover up to (2) two renters -- and the quote is cheaper than belairedirect even at the "Platinum" level. I would still like to hear from the crowd as I am still checking out quotes and shopping around.


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