Home insurance Recent Posts

Approximately one third of Canadians live in rented accommodation, so it may not come as a surprise to know that the number of Canadians who rent their homes grew by 21.5% from 2011 to 2021.

Renting is a great way for many homeowners to offset high mortgage payments, but not enough people are aware that their home insurance won’t automatically cover rental activities, and becoming a landlord changes the dynamics of how your house is being used.

You know you need home insurance for your main property. But what if you rent out a room in your home or own a secondary property? Do you need both landlord insurance and home insurance?  

It’s estimated that around 42% of homeowners who rent out either a portion or all of their home don’t inform their insurance companies of their rental activities. In addition to that, 24% of homeowners aren’t aware they need to. Unfortunately, the failure to provide full disclosure of one’s occupancy could void a home insurance policy entirely.  

Most landlords, whether they own multiple properties or are solely renting out one room in their home, don’t fully understand their coverage needs. It boils down to the occupancy of your home and any secondary properties you own. The risks associated with renting out a part of your home or another property entirely aren’t covered under a traditional home insurance policy. 

Renting creates a need for supplemental insurance, whether through a separate landlord insurance policy or a home insurance endorsement. Plus, failing to disclose your rental habits to an insurer can cost you more than if you had been upfront in the first place, and it could make it more difficult for you to find insurance in the future. 

Homeowners who only rent a portion of their home still need to disclose their renting habits to their insurer and acquire special insurance, usually in the form of a home insurance endorsement. This only applies if they are also living in the home. 

Home insurance policies are designed to only cover the contents, property, and personal liability of the homeowner and their family – not the renter’s belongings or personal liability. Without sufficient coverage from an endorsement, the homeowner may be responsible for the compensation of lost/damaged belongings of a renters. Always be upfront with your insurance broker. If your insurance provider doesn’t want to insure homeowners who rent rooms or floors in their home, you’ll need to find a different insurance company. A broker can help you find a solution.  

If you’re renting out a secondary property that you own to a third-party, landlord insurance is a must. You won’t need to have home insurance and landlord insurance, as you (the building owner) aren’t occupying the property full-time. Landlord’s insurance covers similar items as homeowner’s insurance, however it will also include coverage for fair rental value. Fair rental value, or FRV for short, is rental income.  

FRV can also be included in your homeowners additional living expense (ALE) insurance if you rent out a part of your home as well. FRV coverage kicks in if the tenant is forced to leave the unit or building due to an insured loss and covers the landlord’s rental income until the unit is livable again. FRV will not cover: 

No, you will need one or the other. You only insure a property once. If you’re renting a room in a home that you live in, you’ll only need a homeowners policy with a rental insurance endorsement added to your policy. But if you’re renting out a secondary property that you don’t live in, you’ll need landlord insurance. 

Whether you’re renting out a secondary property or a portion of your primary residence, landlords should always: 

For further information regarding landlord insurance, or how to ensure you’re adequately protected if you’re renting out a portion of your home, give us a call at Mitch.  

A common question when it comes to landlord insurance is, “Does landlord insurance cover tenant damage?” The simple answer to that is no.

Landlord insurance policies are designed solely for the property of the landlord, whereas tenant insurance protects the tenant’s property. They complete each other, but they don’t intersect – which is why it’s so important for landlords to require tenants to carry their own insurance.

In Canada, renting is growing twice as fast as home ownership. Unfortunately, with so many prospective renters out there, there’s bound to be some bad eggs. People who fail to pay rent on time, who cause damage to the rental property, who hold the landlord liable for damages to their personal belongings, etc. Having tenants acquire insurance is just one protection point in mitigating a landlord’s risk.  

Similar to home insurance, tenant insurance isn’t legally required in Canada. That being said, landlords can make purchasing tenant insurance a condition of the lease agreement.

While landlord insurance doesn’t cover damages to tenant property, there’s some nuances when it comes to damages caused by tenants: 

No. Tenant insurance, on the other hand, will cover damage to the tenant’s personal property if it’s damaged by an insured cause, like a fire. If the tenant did not have insurance and a fire broke out at the rental property, even if it was entirely unrelated to the tenant’s actions, their belongings would not be covered by the landlord’s policy. 

Sometimes. Most acts of intentional tenant damage will not be covered by landlord insurance, nor will general wear and tear, theft or vandalism of landlord property. However, unintentional accidents, such as a fire, may be covered by landlord insurance. It’s generally recommended that landlords not only require tenant insurance from their renter but also a security deposit in the case of damages. 

There are numerous benefits to requiring tenant insurance as a landlord, ranging from reducing financial risk to increasing the potential to attract responsible renters. Requiring tenant insurance for prospective renters as a landlord can: 

Having tenants acquire insurance encourages them to take responsibility and pushes them to take better care of their belongings, as it reinforces the understanding that they are held financially accountable should anything happen to their property. 

Being a landlord involves a series of risks, and that goes beyond rising mortgage rates or inflation. Should a tenant ever be held liable for injuries suffered on the property by a third-party, their insurance coverage would kick in to protect both the financial interests of the landlord and the tenant.  

A landlord’s policy only protects the rented dwelling. It doesn’t provide coverage for the tenant’s property. In the event of a covered claim, such as fire or theft, the tenant’s insurance would activate to cover their property against loss or damages. 

There are dozens of different types of rentals in Canada, from short-term rentals (AirBnb) to college students living in residence on campus. In some situations, having a renter’s policy may not be necessary for your tenant, but that doesn’t mean they’re without protection. Here are some examples of rental types/scenarios and how tenant insurance fits in: 

As you can see, in instances where the tenant may already have their own insurance policy elsewhere (through their parents, at their primary residence, etc.) you may not require them to carry tenant insurance, as they’ll already have protection (and by extension, you’ll already have protection).  

As a landlord, having your own insurance – and requiring your tenant to carry their own policy – is all about mitigating your financial risk. For advice or help on comparison shopping for quotes from some of Canada’s top insurers, contact Mitch Insurance today. We’d be happy to get you started. 

Wondering what your landlord insurance will cost? Knowing the answer can help you budget more appropriately, and provide you insights on how to get the best landlord insurance for your buck.  

Homeowners insurance in Ontario costs an average of $1,250/year. Landlord insurance will cost approximately 15%-25% more than your standard homeowners policy, so expect a landlord policy to roughly cost around $1,435-$1,560/year, or between $120-$130/month. 

As these are only average figures, it’s important to note what goes into pricing landlord insurance. Insurance isn’t a set price and premiums vary, especially between different properties and locations.   Insurers consider the following factors when pricing landlord policies: 

Properties that are only rented part-time – like for two weeks during spring break versus for a consecutive eight months – may cost up to twice as much to insure than long-term rentals. This is because the risk of damage tends to be higher with short-term renters, plus properties that are not occupied full-time tend to have a larger exposure to losses.  

Yes, and the main reason for that is because a rental property isn’t occupied by the policyholder. It’s rented out by tenants – sometimes strangers – and therefore the risk of loss is higher. Short-term rental properties often have more people unrelated to the policyholder coming and going more frequently, which increases the chances of damages and claims, thereby raising your rates. As mentioned above, landlord insurance, on average, costs between 15%-25% more than your standard homeowner’s insurance policy. 

Failing to disclose your rental activities and insuring your property with a homeowner’s policy isn’t a wise idea, either. If you file a claim, and your insurer learns of your rental activities, your claim will likely be denied and your policy may be cancelled, leaving you high and dry without insurance.  

Landlord insurance is not legally required in Ontario, but if you are still paying off the mortgage on your property then it will likely be requested by your bank (just like home insurance).  

There’s plenty of reasons why you’d want to purchase landlord insurance – even without it being a requirement. It protects your investment, your fair rental income (i.e., the payments you’d receive as tenant rent), and your personal liability, should you ever be sued.  

It depends on the insurer, but there’s tons of benefits for requiring your renters to carry their own tenant insurance besides solely lowering your premiums. For one, you – as the landlord – won’t be liable for any damages the tenant is responsible for – their own policy will help pay for that. If they cause damage to your property, their policy will pay your deductible. It will also cover their own belongings, which landlord insurance won’t. 

It can also help you to avoid costly legal fees, as your renter will have their own policy to handle claims, and third parties are therefore less likely to come after you.  

You can require tenants to carry insurance by having it a condition in your lease. Failure to obtain insurance would be a violation of that lease.  

Cheap and insurance are two words that should never exist in the same sentence. When you buy cheap landlord insurance, you often purchase a policy which cuts corners and doesn’t insure you for the things you need it to. This will usually cost you more in the event of a loss than you would have paid had you simply had an affordable, customized policy tailor-made to your needs.  

Mitch can help you find the best landlord insurance in Ontario for your needs, not just the policy with the smallest price tag. To help you save on our your coverage, our insurance brokers might recommend things like: 

As a brokerage for over 70 top-rated insurers, Mitch can help you find great landlord insurance in Ontario. Give us a call to discuss your rental properties today.  

Whether under a landlord insurance policy or an endorsement included with your home insurance, landlords have fair rental value coverage if they suffer a loss of rental income because the property they’re renting is temporary unlivable after a covered claim.

Here’s how it works.

Fair rental value coverage triggers when a unit is unoccupied by a tenant, but the landlord can prove that it could be occupied, were it not for the damages from an insured loss. Say you, the landlord, had purchased a property with the intentions to rent out the basement to one tenant and the main floor to another. Unfortunately, there’s an electrical problem in the basement which causes a fire, so the basement must be gutted for repairs before a tenant can move in. 

In this case, the landlord would be eligible to claim fair rental value from the basement, as they cannot bring in a tenant due to the damages because of an insured loss.  

Fair rental value coverage would help if a tenant can’t live in the space for an extended period after a covered loss, resulting in the landlord losing the tenant altogether. Since the landlord can’t obtain a new tenant while the space awaits repair, they would be eligible for reimbursement through their fair rental value coverage. 

Not all damage will render a property totally unlivable. If a claim only requires minimal repairs or a few days of emergency services where the tenant can still live in the unit, the tenant would still need to pay rent and the landlord would not be eligible for reimbursement through fair rental coverage. If the tenant is forced to evacuate during repairs or due to emergency services, then they can claim additional living expenses (ALE) from their own insurance.  

Fair rental value coverage also won’t apply if: 

Fair rental value coverage is for the property owner only. Your tenant would need to use their own renters insurance policy to receive a payout for their damaged belongings or for ALE. This is why landlords should always ensure their prospective tenants have secured renters insurance as per the lease agreement.  

Many landlord policies will include endorsements which require coverage for 100% of the fair rental value. For example: 

Imagine a building was insured with a fair rental value of $10,000/month. This is the amount it would take to cover all the units’ rent for a single month. An insurance policy that requires coverage for 100% of the total fair rental value would mean that the landlord would need to purchase coverage of at least $120,000 to guarantee full protection against loss of rental income for the maximum duration of the policy (up to 12 months). ($10,000/month x 12 months = $120,000.)  

On the other hand, many policies will limit fair rental value coverage to 10% of the dwelling coverage. If a policy has dwelling coverage for $500,000, then the landlord would be eligible to claim up to $50,000 for fair rental value reimbursements until the property has been restored, repaired or until the 12-month policy max is up (whichever is shortest). Usually, if repairs last longer than 12 months, you won’t be eligible to claim any more money after that point. Coverage ends at the earliest date for which the property is habitable again.  

Both fair rental value and ALE are coverages included in the loss of use section of your homeowners or landlord insurance policy. Fair rental value reimburses you for your lost rental income, whereas ALE pays for your temporary living expenses if you need to relocate because of a covered claim. 

So, say for example you rented out your basement, and your home had a fire which rendered it unlivable. Your fair rental value coverage would reimburse you for your  tenant’s rent, and your ALE would cover you and the rest of your family for any temporary living expenses incurred while your home is unlivable.  

Whether you’ve insured your rental property under your home policy or a separate landlord policy, fair rental value coverage is usually included as part of your policy’s loss of use section. Landlord insurance does cover loss of rent (barring certain circumstances) so long as the policyholder has fair rental value coverage. Note that fair rental value coverage only activates if the loss was due something that’s already covered by your property policy (home or landlord). Usually this includes: 

For more information about fair rental value coverage, contact a Mitch Insurance broker. As brokers for over 70 of Canada’s top insurers, we’d be more than happy to answer all your questions and help you shop for a great deal on landlord insurance. Give us a call today. 

If you’re one of over 760,000 Canadians who still heats their home with a wood burning or pellet stove, you should know that the presence of your stove could be raising your insurance rates. Wood burning stoves in Canada are usually inefficient as a primary heating source and are often older, potentially leading to dangerous circumstances with leaking fumes and confined fires.

Insuring a home with potentially dangerous features isn’t something a lot of companies like to do. Insurers that do provide coverage for homes with wood stoves are likely to perceive that wood stove as much a liability risk as, say, a swimming pool.

Wood burning stoves, or similar alternatives, raise doubts when it comes to insurability. Here’s why.

One in 50 Canadian households own heating stoves, three-quarters of which are wood burning stoves. A misconception is that homes with wood burning or even pellet stoves will be uninsurable, but that’s not necessarily true. The presence of a wood burning or pellet stove will, however, likely lead to higher insurance premiums.

This is because both wood burning and pellet stoves increase the potential for fire and structural damage. Here are some hazards to consider with these stoves:

Wood stoves are sometimes features of older homes, or you may have chosen to invest in one for the cozy ambiance, but unfortunately there are some risks that come with them. Always be upfront with your broker and insurer about the presence of a wood stove in your home. Not telling the truth may result in your claim being denied and could even risk your policy being voided altogether.

Short answer: yes. Having a wood stove won’t automatically disqualify you for coverage, but there will be some pre-requisites you’ll need to fulfill first. Many insurers will require a woodstove or fireplace to pass a “Wood Energy Technology Transfer” (or WETT) inspection, plus they’ll ask about:

Without proper evidence of the above or a completed WETT inspection, your insurer may send an inspector to your home to inspect your stove and determine your eligibility for coverage.

We recommend having an inspection done every five years to ensure your wood burning stove is adequately maintained.

Usually pellet stoves require less manual maintenance than wood stoves do and can be automated to add pellets and the thermostat may be used to control temperature more efficiently.

Overall, pellet stoves are considered safer due to their controlled burning process. They can use either a chimney or a vent, and there’s no need for an outdoor wood pile on your property with pellet stoves. They do, however, require an electrical power source.

Most insurers will view pellet stoves more favourably than wood stoves and while they’ll increase your premiums, it will likely be by less than 10%. Wood stoves, on the other hand, will increase your insurance by much more. Contact your insurance broker to get a deeper explanation of how either type of stove will end up impacting your insurance rates.

Wood stoves will increase your insurance premiums by roughly 10%. You may be able to offset the increase by choosing a higher deductible, but of course we don’t always recommend this as it will mean paying a higher out-of-pocket amount in the event of a loss.

Clients should always hold on to maintenance receipts, as insurers may request proof of regular inspections and cleanings. And remember – although you might think not disclosing your wood burning stove or maintenance habits will save you money, it can result in your claims being denied or your policy being cancelled. Always be honest with your broker and insurer.

Here are some of the insurance companies Mitch works with and their primary and secondary wood stove heat source requirements:

Affordable housing has been a hot topic in Canada for some time now, with housing prices at an all-time high and three quarters (75%) of prospective homeowners saying that they cannot afford to be homeowners. Many younger generations are turning to renting, which can be an effective solution and more affordable the more roommates you live with to help even out the cost of monthly rent. Unfortunately, as it turns out, renting to numerous (unrelated) individuals can be a liability risk, and many insurers will refuse to insure a property occupied by three or more unrelated tenants.

Insurance is about risk, and as the industry evolves, underwriting becomes more precise as we build more and more data history. We can see, with more precise accuracy, what circumstances are likelier to result in a claim.

Statistically speaking, the more tenants, the higher the risk. It doesn’t matter how good a tenant you are. There are thousands of tenants in Ontario, so there’s bound to be a couple bad eggs that will inflate the risk for other good tenants. Sadly, that may mean those of us who are renting out a property to 3 or more tenants may have limited choices when insuring their properties.

A rooming house is a term a company will use to refer to a rental when it’s rented out to three or more unrelated tenants. That unit is self-contained and is considered an accommodation with a kitchen and at least one bathroom. If any tenants should have to leave the unit to access either the kitchen or bathroom, then the unit is no longer considered a self-contained unit. Should you have a house with 2 units where there’s 2 tenants in the 1 unit and 1 in another, but they share a bathroom or kitchen, then it’s not self-contained and the unit would also be considered a rooming house.

*To note, each insurance company has its own guidelines and definitions for what constitutes as a “rooming house” so it’s important to check!

With a rooming house the risk becomes more commercial than residential, and not every insurance company would offer coverage for these types of risks. It’s simply a business decision that is made internally in every insurance company.

Another issue with multiple tenants is that oftentimes insurance companies will require each tenant have a signed annual lease. If there are multiple self-contained units, each unit will need to be occupied by a tenant with a signed annual lease. Some companies may even deny claims for damages if even one out of three of the tenants does not have a signed annual lease.

The risk profile, and the definition of the property, shifts when the tenants are related. It boils down to what those tenants are doing on a day-to-day basis. Where three or more unrelated tenants might be doing anything independently, from running their own AC to even using too appliances for what an outlet is capable of handling, families are often more collaborative which means less risk of things being left unattended or forgotten.

Finding landlord insurance for a rental property becomes that much more difficult if the number of tenants that you house changes the conditions of your risk profile. Landlords might be facing the following challenges when insuring a property with 3 or more tenants:

If you’re in a situation where you find yourself having to pay extra for niche coverage to insure a property with 3 or more tenants, you might be looking for ways to cut costs. Reducing your risk is a sure-fire way to mitigating your odds of a loss and qualifying for lower rates.

Tenant insurance is not a legal requirement in any province in Canada, but you as a landlord can make it a part of your rental agreement by containing it as a clause in your lease. If your tenant causes unintentional damage, yes, your landlord insurance could cover the property, but so could the liability portion of their policy if you choose to seek compensation that way. There would be minimal, if any impact on your premiums this way, and you could keep your record clean.

Requiring insurance can help filter out undesirable tenants, as those who do not meet the insurance qualifications may not be the ideal candidates for renting your property. Affordability should not pose an issue when it comes to tenant insurance. Therefore, if a prospective tenant expresses concerns about the additional cost, it might indicate financial stress. There are a lot of myths about tenant insurance, and it being expensive is one of them. If a tenant can’t afford insurance, they likely can’t afford rent!

If you want it done well, do it yourself. Maintenance and repairs are a critical part of rental ownership, and it also keeps your tenants happier (which can aid in retention.) Regular preventative maintenance is best done when you do it yourself, especially the menial tasks like checking for leaks or faulty pipes, scheduling regular pest control, ensuring all emergency alert equipment is functioning properly, and changing out all air filters regularly to ensure optimal HVAC performance.

However, if you don’t live near your rental property or there’s some tasks you’re unable to do, hire a reputable company to do it for you.

If you have prior experience as a landlord, you’re likely aware that tenants can sometimes pose challenges. Take the time to review each application carefully, and even consider creating a standard list of qualifications to judge each application.

Check for creditworthiness, criminal background, prior rental history, and income verification. You may even wish to request previous landlord references. The more reliable your tenants, the likelier you are to go without issue for the course of the renting period!

Adhering to regulations may not save you on your insurance, but it can save you from an unexpected lawsuit from accidentally breaking a law. That lawsuit in and of itself can cost you, big. Study all applicable provincial and federal laws regarding rentals before you make an ad for tenants.

Remember as well that your regulations could change by city, so it’s worth checking landlord-tenant specific laws for your local area as well.

While this might seem like an added cost, hiring a property manager can save you both time and money in the long run. Some property management fees, and operating expenses may also serve as a tax-write off for your rental. It also relieves you of a lot of unwanted responsibilities, such as rent collection, maintenance, tenant screening, and more.

A Mitch Insurance broker can discuss your landlord insurance with you if you need more information, especially for obtaining coverage for a property housing 3 or more tenants. Give us a call today.

Thanks to Mitch Insurance’s Jesica Ryzynski, registered insurance broker since 1997, for reviewing this post.

There’s a popular notion out there, most likely fueled by old Hollywood movies, that so-called “acts of God” are not covered by home, car or life insurance policies. This is more myth than reality. But there are some caveats to keep in mind. Your standard home insurance policy is equipped to deal with damage to your property caused by severe storms like hurricanes, ice storms and hail. And while floods and earthquakes aren’t covered in a standard policy, these types of natural disasters can usually be included by purchasing add-ons or endorsements. The only natural disaster that Ontarians cannot generally insure against is a landslide.

The effects of climate change have begun to impact our lives in very tangible ways, and the insurance industry is starting to feel the heat in more ways than one. Of the ten worst years ever for insurance losses related to severe weather in Canada, nine of them have been in the last twelve years (2011-2022). Severe weather losses in 2022 totaled more than $3.1 billion, the third highest ever, and these trends show no signs of reversing.

With statistical models now warning us that extreme weather events are only going to increase in intensity and frequency in the coming years, it has never been more important to ensure that you have the right coverage.

So let’s focus on what natural disasters are commonly covered under a typical home insurance policy, and which ones need to be added through endorsements if necessary.

What kind of coverage you ultimately have depends on a number of factors:

Floods and earthquakes are NOT covered by a standard home insurance policy, but can be added by endorsement. This means that, depending on where you live, you can usually be covered, it’s just going to cost you more.

Earthquakes: While earthquakes are more of a concern out west, here in Ontario there is reportedly a 10 – 15% chance that the Ottawa area could see a substantial earthquake within the next 50 years.

^{Note: Damage from a tidal wave or tsunami that’s caused by an earthquake, isn’t typically covered.}

Floods: Water damage is now the number one cause of home insurance claims. It accounts for roughly 50% of all payouts by insurance companies. More and more people are vulnerable to this kind of natural disaster, yet many of us are only protected from water damage if the source of the flood is located inside the home, such as from a burst pipe.

The premium for these special endorsements, or add-ons, are based on four factors:

There are a number of things you can do in and around your home to help minimize the risks and prevent extensive damage in the event of a natural disaster. Some of these are even required in many municipalities, so it’s wise to check.

^{Note: Some municipal governments offer rebates for home improvements that help lower your risks.}

If you already have comprehensive car insurance, you’re most likely covered for damage or loss resulting from a major weather event. Still, it’s a good idea to review your policy for any specific exclusions or speak with your broker.

Here are some handy tips for mitigating the risks to your vehicle:

Call Mitch at 1-800-731-2228 today to find an insurance policy that provides you shelter from the coming storms.

To date, the 2023 wildfire season in Canada has been 13 times worse than the 10-year average for this time of year, and if conditions don’t change dramatically it will be easily the most destructive one in Canadian history. Many of us who live nowhere near an active fire can smell smoke in the air, and there are air quality advisories throughout the country.

Here are a few statistics (as of June 6) to put the magnitude of the fires into context:

Whether or not your home is close to an active fire, the smell of smoke and constant news about this record-breaking wildfire season may have you thinking twice about whether your home, car, cottage and other property is adequately protected. Here’s what you need to know.

In short, yes. The full answer is a little different for your home and your car.

Most home insurance policies cover fire, subject to a deductible (usually $500 to $1,500). If the building is damaged or destroyed by fire, insurance will pay for it to be repaired or rebuilt, to replace lost belongings, and for additional living expenses during the time that you are unable to live there.

If you have full coverage on your vehicle (including comprehensive), your auto insurance will cover fire damage to your car, subject to your deductible. If you have loss of use coverage, that will pay for a rental car while your vehicle is being repaired or while you shop for a new one. There is a dollar limit to the rental coverage, typically $1,500 or $2,500.

If you don’t currently have home insurance and want to buy a policy because a wildfire is threatening your region, you are unlikely to find an insurance provider that will sell you one. Most insurers have strict rules about this. If you’re within 50 km of an active fire, you won’t find any takers. Some companies may have restrictions of 100 km or more.

The good news is that you shouldn’t have any problem renewing your home insurance if your policy happens to expire while a fire is burning nearby. However, most insurance companies won’t let you make changes to your policy like increasing coverage or decreasing your deductible, while there is an imminent threat. Similarly, you won’t be able to modify coverage on your car or add comprehensive coverage if you don’t already have it.

If you are subject to an evacuation order, your home insurance should pay for additional living expenses up to 14 days. This may include things like a hotel room, restaurant meals, and extra fuel or transit costs. Remember that the key word is “additional”. If your family usually spends $250 a week on groceries and has to order prepared meals while you’re out of your home, insurance will cover a reasonable amount for restaurant meals, minus the $250 that you would usually spend. Same with transportation costs, which you can claim say if your commute to work is typically 5km but becomes 25km from your temporary residence. If you have pets and you need to keep them in a kennel, that may also be covered.

Whenever there is a threat of fire, your safety and that of your family should always be top of mind. Homes can be rebuilt, people can’t. Insurance is there to protect your investment in your home if anything should happen. Always follow directions from the authorities. If you are told to evacuate, don’t hesitate to do so.

You can help to protect your home and your community from fires in the following ways:

Most of the homes in Ontario are not within 100 km of an active fire, so if you don’t have insurance and news of the wildfires has made you reconsider, we would love to get you competitive quotes from some of Canada’s best home insurers, and walk you through all your options. Give us a call today.

Rising insurance deductibles for condo corporations could be leaving condo owners at risk of significant financial losses. A story about a Toronto condo owner that was left on the hook for $27,000 in damage to other units in her building has highlighted a potential gap in coverage that could affect anyone who owns a condo unit in Ontario.

“Condo insurance can be tricky,” says Becky Burnett, Sales Broker at Mitch. “Because there’s more than one policy that applies, it’s important to make sure that the different policies are aligned and that there are no gaps so you don’t have any nasty surprises.”

The gap in this case is between the condo corporation’s master insurance policy and the unit owner’s condo policy. To better understand how it all works, here is a breakdown of the different insurance policies that apply to a condo building:

Condo corporations in Ontario are required to have a master condo insurance policy. This is a type of business insurance that protects the common elements of the building, like the concrete walls and floors, underground parking, lobbies, hallways, elevators, plumbing, electrical and HVAC systems. Like most insurance policies, deductibles apply and the amount may vary for different types of claims.

Unit owners share the cost of this coverage through their monthly maintenance fees.

Unit owners usually have their own condo insurance policy. This covers liability for losses to third parties, furniture, appliances and other belongings in the unit, and any fixed parts of the unit that are not covered under the master policy. Depending on the condo bylaws, this can include lighting and plumbing fixtures, drywall, cabinets and floors. Any upgrades made to whatever was considered a standard unit (wood floors, fixtures, etc.) are also covered under the unit owner’s policy.

Condo insurance for unit owners also includes coverages that are meant to fill gaps in the master policy:

If the condo suffers damage to common elements, that’s covered under the master policy, but a deductible applies. If there’s a claim, the condo corporation can recover the deductible from the unit owners. So if your condo has 20 units and has to pay a $50,000 deductible, you could get a bill for $2,500. Your loss assessment (property) coverage would pay for this.

The condo corporation master policy also includes liability coverage which protects against things like slip and falls in common areas, or injuries in a pool or gym. If the master policy has a lower liability limit, a large claim could exceed that limit, and the corporation would recover the balance from the unit owners. Say there was a $6 million court award for a fatal drowning or fire, and the liability limit on the master policy is only $5 million, 100 unit owners would each be responsible for $10,000. This would be paid by the loss assessment (liability) coverage in your condo policy.

If you have condo insurance, you will have different limits for different types of coverage. In the case of the Toronto condo owner mentioned above, the master condo policy had a deductible of $50,000 and the unit owner had a loss assessment (property) limit of $25,000. Because the damage clearly originated with an escape of water from a particular unit, the condo corporation was entitled to recover the entire deductible from the owner of that unit, instead of spreading the cost around to all unit owners. The first $25,000 was covered. The rest was not.

For a long time condo master policies had relatively low deductibles like $2,500, $5,000 or $10,000. In recent years, condo corporations have been raising the deductibles on master policies to $25,000, $100,000 or even $500,000 in some cases. Condo corporations do notify unit owners when this happens, but those unit owners may not know how it affects them or that it could leave them exposed.

“Condos have been a source of quite a few claims on the commercial side of insurance,” says Burnett. “And that has put pressure on condo corporations. Either increase maintenance fees to pay for higher premiums, or raise deductibles. Most have chosen to raise deductibles, but that passes the problem onto the unit owners.”

Fortunately, the solution is fairly simple.

“Insurance policies can be confusing,” says Burnett. “Like the fact that there are two different coverages both called loss assessment. If you’re not sure, give us a call. We’d be happy to look over your policy and make sure your limits are what they should be. That’s what we’re here for.”