Insurance Implications of Renting Out Part of Your Home

More than one-quarter of B.C. house owners rent out a portion of their home

Vancouver, B.C. (Aug. 24, 2015) – Over the past 6 months, Square One Insurance has talked to over 4,000 house owners across Canada and has found over 14% of them rent out a portion of their home to non-family members. BC has the highest rate at 25% while the Prairie Provinces have the lowest at 5%. This could be a basement suite in the home, or a garage converted to a laneway home. Vancouver-based Square One says that while mortgage-helpers are well, helpful, there are implications to a home insurance policy that they need to be aware of.

“The high percentage of people renting out a portion of their houses is understandable given today’s economy and the rising price of real estate across the province,” says Daniel Mirkovic, Square One’s President & CEO. “In fact, we suspect the actual percentage is considerably higher. Some people may be reluctant to disclose this information to their home insurance provider if they haven’t secured necessary municipal approvals and permits.”

The rental income from your tenants can be a great help in paying off your mortgage. But if you’re considering renting out part of your home, be sure to discuss it with your insurance provider first. A rental suite may or may not be allowable under the type of policy you have, and adjustments may need to be made in order for coverage to remain in place. Here are some things to keep in mind when you’re considering renting out a portion of your home:

  • If you built a rental suite in your home, you’ve likely increased the value of the property. Most insurance policies require you to advise them within a certain period of time of any improvements over a certain amount. If you fail to do this, you may find yourself underinsured in the event of a loss. Your insurance agent can help you determine the new replacement cost of your home.
  • Your home insurance policy likely requires you to advise your insurance agent if you are going to make any significant changes to the building, or to how it’s used. Your policy was sold to you based on the fact that it was a single-family dwelling. If it becomes a multi-family dwelling, and if you neglect to advise your insurance agent, your policy could be invalid.
  • More people living in the home leads to an increased liability risk. If your tenant, or a guest of your tenant, trips on a ladder in your backyard, or slips on an icy step, you can be sued for their injuries. You may want to increase your liability coverage, and may pay a slightly higher premium due to the increased risk.
  • Your homeowner’s policy will not cover your tenant’s property, nor will it cover your own property in the unit, such as window coverings, appliances, or furniture in a furnished suite. You may need to add “landlord’s property” insurance to cover anything you own. And make sure your tenants carry their own insurance. This will cover their personal property, and it may cover your property, if they unintentionally damage your home.
  • A number of municipalities have changed their bylaws to allow the conversion of a garage to a laneway home. The insurance on your laneway home will need to be upgraded to cover a secondary dwelling to protect it to its full replacement value, or you will need to purchase a separate policy for the laneway home.
  • If you’re counting on that rental income to help pay your mortgage, you should purchase insurance to protect you in the event that income is lost. If there is a fire or other insured loss, and your tenants move out while the property is being repaired, your insurance can replace the income you’ll lose while the property is uninhabitable.

Since more and more people are creating rental spaces in their homes, it’s important to have the right insurance coverage in place. To learn more, speak with your insurance provider or call Square One at 1.855.331.6933. And for more home insurance tips, visit

About Square One

Established in 2011 and based in Vancouver, British Columbia, Square One offers the only home insurance policy in Canada that can be personalized to your unique needs. That means you only pay for the protection you need. Square One is also one of the few providers to automatically include earthquake, sewer backup and broad water protection in its policies. Square One currently serves British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. For more information about Square One, or to get an online quote, visit

Source: Square One Insurance Services Inc.