A lot of landlords find out the hard way that their home insurance policy doesn't cover rental properties. A tenant floods the bathroom, a fire breaks out, someone slips on the front steps — and suddenly they're learning about policy exclusions at the worst possible moment.
Getting the right insurance is straightforward once you understand what you're actually buying. Here's what Ontario landlords need to know.
Why Your Home Insurance Policy Isn't Enough
Standard home insurance is written for owner-occupied properties. The moment you rent out a property — even a basement unit in your own home — the risk profile changes significantly in the insurer's view.
If your insurer finds out you've been renting and you didn't tell them, they can deny a claim. That's not a technicality they rarely use — it's a real risk. Insurers ask about occupancy specifically because it affects their exposure.
If you're renting any residential property in Ontario, you need either:
- A dedicated landlord insurance policy (also called rental property insurance or dwelling fire insurance), or
- A home insurance policy with an explicit rental unit endorsement added to it (common for basement suites in owner-occupied homes)
Talk to your broker. Don't assume your existing policy covers it.
What Landlord Insurance Typically Covers
Coverage varies by policy and insurer, but a solid landlord insurance policy should include:
Building and Structure Coverage
This covers the physical structure — walls, roof, plumbing, electrical, built-in appliances — against perils like fire, windstorm, hail, certain water damage, and vandalism. Review what's included and what's excluded; "all risks" policies are broader than "named perils" policies.
Liability Coverage
This is essential. If a tenant, visitor, or even a passerby is injured on your property and sues you, liability coverage pays for legal costs and any settlement. A minimum of $1–2 million in liability coverage is standard; $2 million is strongly recommended for rental properties.
Slip-and-fall claims in winter are a real concern for London and southwestern Ontario landlords given the ice and snow. Make sure your liability coverage is adequate.
Loss of Rental Income
If your property becomes uninhabitable due to a covered loss (fire, major water damage) and you can't collect rent while repairs happen, this coverage replaces that lost income. This matters more than many landlords realize — repairs in Ontario can take months, and carrying a mortgage on a vacant property is a serious financial hit.
Vandalism and Malicious Damage
Some policies cover malicious damage caused by tenants. This is different from normal wear and claim, and different from accidental damage — it's intentional destruction. Check whether your policy includes it and what documentation you'd need to make a claim.
What Landlord Insurance Does NOT Cover
Understanding the exclusions matters as much as knowing the coverage:
- Tenant's personal belongings — your policy covers the building, not what's inside it. A tenant's furniture, clothing, and electronics are not your responsibility.
- Normal wear and tear — that's not a covered loss; it's an operating cost.
- Gradual water damage — a slow leak that you didn't address is often excluded.
- Certain types of flooding — overland flooding and sewer backup often require separate add-ons.
Sewer backup coverage is worth adding if your property has a basement, particularly in older areas of London or St. Thomas where combined sewer systems are common.
Requiring Tenant Insurance: Why It Matters
You cannot legally require a tenant to have tenant insurance in Ontario — it's not something the RTA permits you to make a condition of tenancy. But you can strongly encourage it, and including a request in your lease is reasonable.
Here's why it matters to you as a landlord:
Liability from their side. If a tenant accidentally starts a fire, your landlord insurance will likely cover the building damage — but a tenant without insurance may not be able to compensate you for your deductible or any uninsured losses. A tenant with renter's insurance has their own liability coverage.
Displacement. If the property becomes uninhabitable after a loss, a tenant with renter's insurance can cover their own temporary accommodation costs. Without it, they may demand you house them or may become much harder to deal with during an already stressful repair period.
Your deductible risk. Landlord policies often have deductibles of $1,000–$5,000. If a small tenant-caused loss doesn't exceed your deductible, you're paying out of pocket. A tenant with renters insurance has coverage that could cover that gap.
Many landlords include a clause in the lease saying the tenant is "strongly encouraged" to obtain tenant insurance and that the landlord is not responsible for the tenant's personal property. While this doesn't create a legal obligation, it sets clear expectations.
How Much Does Landlord Insurance Cost?
Rough estimates for Ontario rental properties:
- Single-family home: $1,200–$2,500/year
- Condo unit rented out: $600–$1,200/year
- Multi-unit building: Priced per unit, often $800–$1,500 per unit annually
Factors that affect your premium include the property's age, location, construction type, your claims history, and the coverage limits you choose. Properties in areas with older plumbing or electrical systems (knob-and-tube wiring, galvanized pipes) will see higher premiums or possible exclusions.
Get quotes from at least two or three brokers who specialize in rental property. Rates vary significantly.
A Note on Multi-Unit Properties
If you own a duplex, triplex, or larger building, the insurance structure is different again. You'll typically want a commercial rental property policy rather than a residential landlord policy — the underwriting criteria are different. This is another reason to use a broker who deals with investment properties regularly rather than a generalist personal lines insurer.
Getting insurance right is one of those foundational tasks that's easy to put off and painful to learn about after a loss. It's also one of the things we make sure is sorted for every property in our portfolio — because the financial exposure from an uninsured loss can be catastrophic.