If you own a place in Ontario and you rent it out (or rent out part of it), you usually need rental property insurance that matches how the home is used. A regular homeowner policy is priced and written for you living there full-time. Once tenants are involved, the risks change — and your coverage can change too.
This guide is general information, not legal or insurance advice. Policies vary by insurer, building type, and tenant setup.
The first rule: tell your insurer before you rent it out
This is the easiest mistake to make and the most expensive one.
If you start renting out a basement, a room, or the whole property, you should tell your insurer and keep a record of that notice (email works). Some official consumer guidance in Canada is blunt about this: when living arrangements change, you need to inform your insurer.
If you don’t, the insurer may treat the rental as “not disclosed,” and you can end up in a fight during a claim.
What “rental property insurance” usually covers
Most Ontario rental/landlord policies are built from the same core pieces. The names can change by company, but the idea is similar.
1) Building (the structure)
- Fire, smoke, wind, some water damage (varies)
- Detached garages/sheds sometimes count too
2) Landlord liability
- Helps if someone claims they were hurt due to something connected to the property (example: a stair issue, icy steps)
3) Loss of rental income (loss of rent)
- If a covered event makes the unit unlivable, this can help replace rent for a set time, up to limits
Read: If you’re planning next year’s cash flow, also check Ontario rent increase rules so you don’t build your budget on the wrong rent assumption.
Quick math check (useful when you compare quotes)
- Monthly rent × number of months covered = the “cap” you should understand
Example: $2,200 × 6 months = $13,200
4) Your landlord contents
This is not the tenant’s stuff. It’s what you own and provide:
- Appliances you supply
- Window coverings you own
- Tools/equipment stored on site (varies)
What landlord insurance usually does NOT cover (common surprises)
Every policy is different, but these exclusions show up a lot:
- Wear and tear (old roof, old plumbing)
- Mould (often limited or excluded)
- Damage by a tenant’s household can be excluded in some home policies, especially for theft by tenants/roomers/boarders
- Intentional acts and criminal activity
- Vacancy/unoccupied periods after a time limit (more on this next)
This is why reading the “special limits” and “exclusions” page matters more than the marketing page.
Vacancy: the quiet rule that can wreck a claim
Between tenants, during renovations, or while you’re trying to sell, a home can be considered vacant or unoccupied. Many policies have a time limit (often around 30 days) where coverage becomes restricted unless you arrange a vacancy permit or special coverage.
If your rental might sit empty:
- call/email the insurer before day 30
- ask what they consider “vacant” vs “unoccupied”
- ask what coverage changes after the time limit
Short-term rentals (Airbnb/Vrbo): assume you need special coverage
Short-term rentals are not the same as a one-year lease. Many standard home policies exclude or limit short-term rental activity unless you add the right endorsement or policy.
If you host short-term guests:
- say it clearly when you quote (don’t call it “renting a room” if it’s rotating guests)
- ask if you need a “home-sharing” or “short-term rental” add-on
- don’t rely only on platform protection
Pick the right policy: 5 common Ontario setups
This is the part most people actually need.
1) You do NOT live there (full rental house/duplex)
Usually: Landlord / rental dwelling policy (not homeowner)
2) You live upstairs and rent the basement
Usually: Homeowner policy + rented suite endorsement (or a landlord add-on)
3) Condo you rent out
Usually: Condo landlord policy (your unit + your liability)
Also check your condo corporation’s insurance and what you must cover (deductibles, upgrades, unit improvements).
4) Student rental
Usually: landlord policy, but be ready for extra questions:
- number of bedrooms / occupants
- who manages the property
- fire safety details (smoke/CO alarms, exits)
Some insurers rate this differently than a single family.
5) Short-term rental
Usually: homeowner/landlord base policy plus a short-term/home-sharing endorsement (or a dedicated policy)
| Situation / risk | What to ask for | Why it matters |
|---|---|---|
| Renting out a room or basement | “Do I need an endorsement?” | Official guidance says notify insurer when you rent part of your home |
| You don’t live in the rental | “Do I need a separate landlord policy?” | Industry guidance says a separate policy is usually needed for non-owner-occupied rentals |
| Short-term rental hosting | “Do you cover home-sharing / short-term rentals?” | Many standard policies limit/exclude without a specific add-on |
| Property empty between tenants | “What happens after 30 days unoccupied?” | Vacancy clauses can reduce/void coverage without extra steps |
| Theft / damage by tenants | “Are tenant/roomer thefts excluded?” | Some policies exclude theft by tenants/roomers/boarders |
If you’re comparing options, a local Ontario insurance broker can confirm which landlord policy fits your setup.
What to bring when you request quotes
Have this ready — it speeds up quotes and reduces mistakes:
- Address + year built + roof age (approx.)
- Heating type (gas/electric/oil) + electrical panel type (if known)
- Plumbing updates (if any)
- How it’s rented: whole home, basement suite, rooms, short-term
- Number of units + number of occupants
- Who lives there (you vs tenants)
- Any prior insurance claims (if asked)
- Property management (self-managed vs managed)
Then ask one key question:
“If the unit is empty between tenants, when do I need to notify you?”
If something goes wrong: who regulates what in Ontario
If you’re dealing with an insurance broker in Ontario, brokers are regulated by RIBO. For complaints, Ontario’s regulator FSRA explains how its complaint process works (and when you need to go through the insurer’s process first).
If your tenant leaves at the same time your job changes, it helps to know your backup options — this Ontario severance estimate can give you a rough safety net number.
Rental property insurance Ontario FAQ
Do I legally need landlord insurance in Ontario?
Usually no, it’s not required by law. But if you have a mortgage, your lender may require insurance, and renting without the right policy can create claim problems.
Can I keep my regular home insurance if I rent out my basement?
Sometimes, yes — but you usually need to tell the insurer and add the right endorsement for a rented suite.
Does landlord insurance cover the tenant’s belongings?
No. Tenants need their own tenant insurance for their stuff and their own liability.
Does landlord insurance cover missed rent if the tenant stops paying?
Often no. “Loss of rent” is usually tied to a covered property event (like fire) that makes the unit unlivable, not non-payment. Ask directly.
What if my rental is empty for a month while I renovate?
Ask about “vacant” or “unoccupied” rules. Many policies change coverage after a time limit unless you arrange special coverage.
