The demand for rental housing is exceeding supply despite an increase in the number of rental units available.

In 2023, the Canada Mortgage and Housing Corporation noted Canada had a record-low 1.5% vacancy rate and 8% average rent growth. As multi-tenant rooming or boarding houses become more popular, some provinces and cities are beginning to regulate them. For example, the City of Toronto legalized rooming houses on March 31, 2024, with a bylaw outlining standards, regulatory oversight, enforcement, and licensing.

However, that can benefit landlords, as it allows them to carefully select tenants who can afford to pay their monthly rents on time and avoid holding long-term vacant rental spaces

Being a landlord who rents any property, apartment, unit, or room makes you a small business owner (congratulations!). But with that responsibility comes the need to protect your property and financial wellness with a comprehensive landlord insurance policy.

Do you need landlord insurance to rent out a room?

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Even if you reside at the property where you rent rooms to tenants, you still need a commercial landlord insurance policy, as there are significant differences between a landlord insurance policy and a private homeowner insurance policy.

What Is a Multi-Tenant Rooming or Boarding House?

The precise wording of what a multi-tenant rooming or boarding house is may vary by municipalities and insurers, however, they are commonly regarded as a building or home where three or more rooms are rented out to people who are not related. 

A rooming house features common areas equally shared by tenants, including the kitchen, main entrance, living room, laundry room, and possibly washroom facilities.

Does Landlord Insurance Cover a Rooming House?

Yes. Landlord insurance is designed to cover rooming or boarding houses and other residential properties available for rent or lease, including homes, apartments, and condominium units.

Rooming houses are unique in that they may have higher liability risks than single-family dwellings or individual rental properties. Insurers may deem rooming houses high-risk residential properties, making getting the insurance you need more challenging. However, Zensurance specializes in helping small business owners, including landlords, get the low-cost protection they need. 

Does Landlord Insurance Cover Your Tenants?

No. A landlord insurance policy does not cover your tenants’ possessions or their third-party liability risks. 

It’s designed to protect your building, fixtures, appliances, and any furnishings you leave in the place for tenants to use from damage and loss due to fire, water, a natural disaster, theft and vandalism, as well as your liabilities, such as third-party bodily injury and third-party property damage claims.

What Does Landlord Insurance for a Rooming House Include?

A landlord insurance policy for a rooming or boarding house may include the following coverages:

  • General liability insurance: General liability insurance is designed to cover you for third-party property damage or bodily injury claims and lawsuits. For instance, if you are sued for bodily injury damages by a tenant or a visitor to your property after they slip, fall and are injured, general liability insurance may cover the injured person’s medical expenses and funds to retain a lawyer if you are sued.
  • Commercial property insurance: Commercial property insurance is what protects your building or rooming house if damaged by fire, water, extreme weather, theft, and vandalism. It also covers damage to and loss of your contents in the dwelling, such as furniture in common rooms and kitchen appliances.
  • Equipment breakdown insurance: Equipment breakdown insurance is designed to pay to repair or replace kitchen and laundry appliances and the HVAC system if they cease to operate because of an internal mechanical or electrical malfunction.

There may be additional coverage you need to create a comprehensive policy. Speak to a licensed Zensurance broker if you have questions about what your policy should include.

4 Ways to Minimize Damages to Your Rental Property or Rooming House

Here are four things every rooming house landlord can do to minimize the threat of damages to their properties and avoid filing an insurance claim:

1. Address Maintenance Issues Promptly

Regular inspections and maintenance on the building and property can reduce the chance of minor issues becoming significant and expensive problems. For example, if there’s a leaky water pipe in the building, fix it immediately. 

Also, ensure the HVAC system provides proper ventilation and temperature control to lower the risk of mold and other moisture-related problems. Lastly, check each room in your boarding house to ensure electrical sockets and light fixtures work, windows and screens are in good condition, and doors, door hinges, and locks are intact and undamaged.

2. Install Security Cameras and Bright Lighting

Having a professional security contractor install a monitored surveillance system for the exterior of the building, as well as bright lighting, can help deter theft, break-ins, and vandalism. Adequate lighting can also prevent the risk of trips and falls on your property that can lead to third-party bodily injuries and property damage.

3. Pre-Screen Prospective Tenants

Vet your prospective tenants by doing a thorough background check on them. Verify their source of income, check to see if they have a criminal record through the Royal Canadian Mounted Police, and get their permission to do a credit check if permitted in your province. Also, ask for references from previous landlords and confirm they’re valid by contacting their former landlords.

4. Maintain Open Communication With Tenants

Communicate with the tenants in your rooming house regularly and encourage them to contact you with any concerns about the property. Doing so can help you address maintenance issues quickly and address any other problems they may have.

How to Get Low-Cost Landlord Insurance Fast

Getting a low-cost, customized landlord insurance policy through Zensurance is the best way to quickly get the coverage you need.

We’ll take the hassle off your hands of getting insured by shopping our partner network of over 50 Canadian insurance providers and tailor it to meet your requirements and budget.

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About the Author: Mario Petramala

Mario Petramala is a Team Lead, New Business, Medical Malpractice, Zensurance.