Insurance for Canadian Landlords: What You Actually Need

Why Standard Home Insurance Fails for Rentals

Standard homeowner's and condo owner's insurance covers owner-occupied properties. The moment a tenant occupies the property, most policies either explicitly exclude coverage or consider the policyholder in breach of the terms — voiding coverage entirely. An insurance claim after a tenant-caused fire or flood, with no valid policy, can leave you personally liable for hundreds of thousands of dollars in uninsured losses. This is not a theoretical risk: insurers regularly deny claims when they discover the property was occupied by a tenant.

What Landlord Insurance Covers

Building coverage: the structure, systems, and landlord-owned fixtures against fire, flood, wind, vandalism, and other insured perils. Loss of rental income: if the unit becomes uninhabitable due to an insured event, this covers your lost rent during the repair period — typically 12–24 months. Liability: if a tenant or visitor is injured on your property, liability coverage (typically $1M–$5M) covers legal costs and damages. Legal expenses: some policies include coverage for LTB applications, eviction proceedings, and tenancy dispute legal costs — this rider is worth the premium.

Tenant-Caused Damage

If a tenant causes damage through negligence (overflow, fire) or intentionally, your landlord insurance may cover you less your deductible. You then pursue the tenant through the LTB for the deductible amount and any uncovered costs. Requiring tenants to carry their own tenant insurance and including this requirement in the lease ensures tenants have liability coverage. Some landlord policies include malicious damage riders — worth the added premium for landlords who have experienced tenant damage. Confirm your policy covers tenant-caused damage specifically.

Getting the Right Policy

Get quotes from: Intact, Wawanesa, RSA, Gore Mutual, and Square One (particularly strong for rental condos). Tell your broker exactly how the property is used — long-term residential rental, room rental, multi-unit residential — and ensure the policy reflects actual use. Critical questions: Is loss of rental income included and for how long? What is the vacancy clause — policies often exclude coverage if vacant more than 30 consecutive days (important between tenancies)? Is sewer backup covered? What is the claims process and your deductible?

Checklist

Checklist