The $20,000 Mistake Ontario Landlords Make

Insurance broker Azita Fathi recently shared a shocking story on our podcast. An Ontario homeowner had a relative living in their basement. When flooding damaged the basement, the homeowner’s insurance claim was denied. Why? They never told their insurance company someone was living downstairs.

The cost? Over $20,000 out of pocket.

5 Insurance Must-Haves for Ontario Basement Apartments

Whether your basement apartment is legal or not, you need to protect yourself. Here are five essential insurance requirements:

1. Tell your insurance company – Even if a family member lives there rent-free
2. Increase your liability coverage – More people = more risk
3. Add rental income protection – Covers lost rent during repairs
4. Require tenant insurance – Make yourself “additional insured” on their policy
5. Install smoke detectors – Claims can be denied without them

Legal vs. Illegal Basement Apartments: What Insurance Companies Care About

Surprisingly, insurance companies don’t ask if your basement apartment is legal. What they care about is:

• Did you tell them someone lives there?
• Is the space safe (smoke detectors, fire exits)?
• Do you have the right coverage?

Tenant Insurance Secrets Every Ontario Landlord Needs to Know

You can’t evict tenants for not having insurance. But you can protect yourself by:

• Making tenant insurance a condition before giving keys
• Getting added as “additional insured” on their policy
• Requiring proof of insurance at lease signing

How Much Extra Will Proper Insurance Cost?

The good news? Proper basement apartment insurance typically costs Ontario landlords less than $50 per month extra. That’s a small price compared to having a $20,000 claim denied.

Are You Making These Ontario Basement Apartment Insurance Mistakes?

• Not disclosing someone lives in your basement (even family)
• Forgetting to update insurance when your property is vacant (30+ days)
• Missing smoke detectors in basement units
• Not requiring tenant insurance
• Failing to get added as “additional insured” on tenant policies

Learn More About Protecting Your Ontario Basement Apartment

Want the full story on basement apartment insurance requirements in Ontario? Listen to our complete interview with insurance expert Azita Fathi on the latest episode of CRESI’s Ontario Landlord Series.

We cover everything from property management insurance benefits to real claim denial stories that will help you avoid costly mistakes.

Local Insurance Resources for Ontario Basement Apartment Owners

Looking for an insurance broker who understands Ontario basement apartments? Start with these trusted resources:

• Insurance Bureau of Canada – Ontario Region
• Ontario Landlord Association
• Registered Insurance Brokers of Ontario

Remember: Your standard homeowner’s policy likely won’t cover your basement apartment. Talk to an insurance professional today about your specific Ontario basement apartment insurance requirements.