If you are renting out a property, or even part of your home, you may not think of yourself as a landlord, but your insurance company does. Renting out part of your home, including a basement suite, or deciding to lease your property while living elsewhere, means you need to reconsider your insurance; even occasional or informal rental arrangements change the rules.
Many Canadians in these situations, however, assume their homeowners’ insurance still applies, unaware that renting to a tenant, no matter how casually, requires different coverage.
In some cases, becoming a landlord wasn’t planned, such as when inheriting a family property or needing to relocate temporarily and choosing to rent out your home in the meantime. Others may just be helping someone out with affordable accommodations. These “accidental landlords” still need to adjust their coverage. Failing to update your policy and failing to notify your insurer can leave you exposed to denied claims, voided coverage, or costly legal and financial risk.
Why Homeowners Insurance Doesn’t Cover Rentals
A homeowner’s insurance policy is built for owner-occupied residences, not income-generating rental properties. Once a tenant moves in, even part-time or in a basement suite, you’ve changed how the property is used, and that changes what the insurer is willing to cover.
Without notifying your provider and switching to the proper policy, you’re at serious risk of:
Claim denial after a fire, flood, or liability incident
Voidance of your policy for misrepresentation
Losing coverage during critical periods like tenant disputes or vacancy
Canadian insurers consistently advise that renting a property, even temporarily, without proper disclosure can invalidate coverage.
How Insurance Needs Shift When You Rent Out Your Property
Your needs change when you become a landlord.
Liability Risk Increases
If a tenant’s guest slips on the walkway or injures themselves on a faulty stair, you could be held liable. Your homeowners’ liability policy might not apply once the property is tenant-occupied. Landlord liability insurance steps in with legal expense and injury settlement coverage tailored for tenant-related claims.
Tenant Relationship Responsibilities
Eviction, unpaid rent, lease violations are legal and financial issues that can arise. Legal expense insurance, included in some landlord policies or available as an add-on, helps with the cost of pursuing or defending legal action against tenants. Some providers offer access to a 24/7 legal advice line.
Contents and Coverage Changes
If you leave behind appliances, furniture, or other non-fixed items, your homeowners’ policy may cover them under personal property. Once the property is rented, only items owned by the landlord and specifically declared may be covered, and only under a landlord policy.
Rental Income Protection
Even if you are an ‘accidental landlord’, you are likely to start counting on receiving rental income, and will need it to compensate for the additional expenses experienced when renting. If your tenant has to move out after a fire or a burst pipe, you won’t just deal with repairs—you’ll lose rental income. Homeowners’ policies don’t cover that. Landlord insurance includes fair rental value coverage, which replaces that lost income while the unit is uninhabitable due to a covered loss.
Common Traps for Accidental Landlords
Short-Term Rentals or Part-Time Use
Renting out your home on Airbnb while you travel? Letting a friend of a friend live in the home while you’re away? These situations seem casual, but they trigger major coverage issues if your insurer isn’t informed. Temporary arrangements still count as tenant occupation.
Tip: For those renting their home for short-term rentals like Airbnb, Airbnb insurance is available, and tailored to this situation.
Secondary Suites or Shared Dwellings
Many assume their homeowners’ policy provides all the coverage they need if they are just renting out a basement suite or room, and still living in the property, but landlord coverage that addresses the tenant’s share of occupancy and risk is still needed.
Inherited or Vacant Properties
Renting out an inherited home, or a house you can’t sell right away? These often start as short-term arrangements but fall into landlord territory.
Tip: A vacancy of more than 30 days without notifying your insurer may also reduce or void your existing coverage.
How to Protect Yourself as a New Landlord
If you are charging rent, contact your insurance provider before tenants move in. Ask whether your current policy can be amended or whether a landlord-specific policy is required.
Zensurance offers landlord insurance policies tailored to both full-time and part-time landlords, with flexible options for:
Detached homes
Secondary suites
Short-term rentals
Mixed-use properties
Duplexes
Condos
Other properties
Plans start as low as $19/month, with available add-ons for legal expenses, flood and sewer backup, equipment breakdown, and more. Zensurance helps ensure your policy matches how the property is actually being used, so you’re not left unprotected when it matters most.
Renting out a property, whether long-term or just while you’re away, changes your insurance needs in ways that homeowners policies aren’t designed to handle. Protecting yourself starts with understanding those differences.
* Issuance of coverage is subject to underwriting by the respective insurance company. The final insurance premium is established, and insurance coverage is offered by the insurance company only after underwriting is completed.
Please note this article contains affiliate links. We may receive compensation for referrals and purchases made through these links.