How Much Does Landlord Insurance Cost in Canada?

What Is Landlord Insurance?

Landlord insurance is a commercial insurance policy designed specifically for rental property owners. It protects you from financial losses tied to renting out residential or commercial property, covering everything from physical damage to liability claims.

It’s not the same as home insurance. Standard homeowners’ policies aren’t built for rental properties. If you’re renting out a property under a homeowners’ policy, you may not be covered when it matters most.

What Does a Landlord Insurance Policy Include?

A landlord insurance policy typically includes four core coverage types:

General Liability Insurance

Covers third-party bodily injury and property damage claims. If a tenant or visitor is injured on your property – let’s say they slip on an icy step and fall. This coverage handles their medical and rehabilitation costs and protects you from a lawsuit. 

Commercial Property Insurance

Covers physical damage to your rental property from fire, water, severe weather, theft, and vandalism. It also covers your business contents inside the building – appliances, furniture, fixtures – up to your policy limit. 

Business Interruption Insurance

If an insurable loss (like a fire) forces your tenants out, this coverage replaces your lost rental income and helps cover your ongoing property expenses, including mortgage payments and utilities while repairs are underway. Sometimes it’s bundled with commercial property insurance; if not, it’s worth adding. 

Equipment Breakdown Insurance

Covers the cost of repairing or replacing building equipment. It covers equipment like your rental property’s HVAC system, laundry appliances, and security systems if they fail due to a mechanical or electrical malfunction.

Note: this is different from wear and tear, which isn’t covered. 

Not sure what else you might need? A licensed broker can walk you through your options and flag any coverage gaps specific to your property.

How Much Does Landlord Insurance Cost in Canada?

The average cost of landlord insurance in Canada ranges from $1,500 to $2,500 per year. 

Your actual premium depends on a mix of factors. Here’s what insurers look at:

• Your location. A rental property in a neighbourhood with high break-in rates, or one that sits in a floodplain, will cost more to insure. Urban and suburban properties in high-risk areas attract higher premiums than comparable properties in lower-risk zones. 

• The building’s occupancy. The more tenants you have, the higher the risk exposure. Insurers look at your total occupancy, and whether it’s within the legally permitted limit. 

• The value of your contents. What’s inside the building matters. Think about the contents of your rental property. Furniture in common areas, appliances, lighting, fixtures – price out what it would cost to repair or replace everything if it were damaged or destroyed. 

• Replacement cost vs. actual cash value: These two coverage options affect your premium significantly. Replacement cost coverage pays to rebuild or replace your property at today’s prices. Actual cash value factors in depreciation. Replacement cost is more expensive upfront but far more protective if disaster strikes.

• The building’s age and condition. Older buildings cost more to insure. A century-old property with outdated systems represents more risk than a newer build, and insurers price accordingly. Newer construction using fire-retardant materials and modern HVAC systems typically earns lower premiums. 

• Plumbing. Water damage is one of the most common and costly insurance claims. According to the  Insurance Bureau of Canada (IBC), insured damage from severe weather events exceeded $2.4 billion in 2025, making it the tenth most expensive year on record for weather-related losses.
  
  Older buildings with galvanized or lead pipes, no sump pump, or no backwater valve are significantly more vulnerable to water damage. That risk shows up in your premium. 

• Electrical systems. Outdated wiring is a serious red flag for insurers. Knob and tube wiring, for example, is obsolete. It lacks grounding wire and can’t handle the power demands of modern electronics. Buildings with old or non-compliant electrical systems will pay more, if they can get coverage at all. 

• The coverages you choose. Adding optional coverage – overland flood protection, sewer backup, equipment breakdown insurance, business interruption insurance – increases your premium. So does choosing lower deductibles or higher coverage limits. The right balance depends on your property and your risk tolerance. The different types of insurance coverage also influence a policy’s annual premium. 

Also, the coverage limits and deductibles you choose per type of insurance affect your rate.

One important note: your landlord insurance does not cover your tenants’ personal belongings or their personal liability. Encourage every new and existing tenant to get renter’s (tenant) insurance. It’s inexpensive and protects them without affecting your policy. 

6 Ways to Lower Your Landlord Insurance Premium

Cutting costs is smart. Cutting coverage isn’t. Here’s how to reduce your premium without leaving yourself exposed: 

1. Conduct Routine Maintenance
   Insurance is not a maintenance contract. Small problems, such as a cracked foundation, clogged eavestroughs, or a slow roof leak become expensive claims if ignored. Catch them early and your property stays in better shape. Your insurer notices.

2. Invest in Security and Safety Systems
   A professionally monitored security alarm, fire detection system, and water sensors in the basement all signal to insurers that your property is well-managed. Bright exterior lighting and deadbolt locks help too. These investments often pay for themselves in premium savings.

3. Screen Your Tenants Carefully
   Reliable tenants mean fewer claims. Run background and reference checks on every prospective tenant – even if you’re renting a room in a house or providing student housing. A bad tenancy is expensive in more ways than one.

4. Review Your Policy Every Year Before Renewal
   Your property changes. Your coverage should, too. If you’ve renovated, replaced the HVAC, or made other upgrades, your building’s value has likely increased, which means your coverage limits may need adjusting. Don’t let your policy auto-renew without a proper review.

5. Opt for Higher Deductibles
   The higher your deductible, the lower your annual premium. Just make sure you have those funds accessible if you need to file a claim. A higher deductible is a smart trade-off if you have cash reserves and a low-claim history.

6. Keep Your Property’s Valuation Accurate
   According to the Canada Mortgage and Housing Corporation, property values fluctuate with market conditions, neighbourhood changes, and improvements. Overinsuring wastes money. Underinsuring leaves you exposed. Get an accurate replacement cost estimate and revisit it annually.

Note: Rental properties are considered businesses by insurers. Therefore, they require commercial insurance since a homeowners’ insurance policy is not designed to cover rental properties.

Frequently Asked Questions About Landlord Insurance in Canada

Is landlord insurance mandatory in Canada? 

Landlord insurance isn’t legally required in Canada, but most mortgage lenders require it as a condition of financing. Even if yours doesn’t, operating without it is a serious financial risk. A single liability claim or major property loss could cost tens of thousands of dollars out of pocket. 

What’s the difference between landlord insurance and home insurance?

Home insurance covers owner-occupied properties. Landlord insurance – also called rental property insurance – is a commercial policy designed for properties you rent to others. Renting out a property covered only by home insurance is a coverage gap that can leave a claim unpaid. 

Does landlord insurance cover loss of rental income?

Yes, through business interruption insurance. If an insured event (like a fire or flood) makes your property uninhabitable and your tenants must temporarily relocate, this coverage replaces the rental income you lose while repairs are completed. 

Can I get landlord insurance for multiple rental properties?

Yes. Many insurers offer multi-property policies that cover several rental units under a single policy, which can simplify administration and sometimes reduce your overall premium. 

Get a Fast, Customized Landlord Insurance Quote 

Landlords and small business owners across Canada trust Zensurance to get them the comprehensive, low-cost coverage they need to safeguard their properties and finances.

Are you ready to protect your rental property with a customized landlord insurance policy?

Fill out our online application for a free quote in less than five minutes.

Our experienced brokers will get you covered with a comprehensive policy through our partner network of 50+ insurance providers, and customize it to suit your needs and budget.

– Updated June 8, 2026.