Many Albertans are looking for ways to help with their bills these days, and renting out a bedroom, welcoming a boarder to your basement, and listing your home on a home-sharing app are becoming more and more popular. Not only do these options allow for a few extra dollars in your pocket, they can also provide company and support in the form of another human.
But while the benefits of sharing your home could be many, it’s important to remember that your home insurance company needs to be made aware of your change of living circumstances. Insurance providers will consider your new arrangement as a change to your risk profile. You are now, technically, a landlord in their eyes and you and your tenant require proper protection.
Why standard home insurance isn’t enough for landlords
There are several reasons why your home insurance provider requires being informed about your taking on a tenant. The first is that although your policy covers your property, its contents, and personal liability for you, your spouse, and your dependents, it does not include your tenant’s belongings or their liability. That means if you are burgled and their property is stolen, they will not be able to file a claim for it.
The second is that if you fail to fully disclose changes in your occupancy your insurance could be voided. For example, if a tenant accidentally causes a fire and your insurer wasn’t informed there was another person living there, your claim could be denied. That leaves you without coverage when you need it most.
It’s also possible that a shorter-term tenant may not treat your property with the same care and attention as you, which increases the potential for damage. The Alberta Landlord Tenant Act is designed to protect both landlords and tenants. Landlords will find information about how to properly evict someone, how much you may ask for a deposit, what to do if you would like to raise the rent, when to give notice for entry, and so on.
Landlords require specialized landlord insurance. As usual, it covers your belongings, property damage, and liability claims, but landlord insurance coverage can also compensate you for lost rental income if you need to vacate due to insured damage.
In short, standard home insurance doesn’t apply to landlords, who must secure appropriate coverage to avoid financial risk and ensure legal compliance.
Five key tips for first-time landlords
- Let your insurance representative know as soon as your living arrangement changes and keep written documentation of that notification.
- Create a complete inventory of your belongings and their condition before your tenant moves in. Document valuable items with photos and receipts, and keep both digital and physical records. Store copies securely and share one with your insurer. Regular updates help ensure accurate coverage.
- Screen potential tenants by conducting background and credit checks, verifying employment and income, contacting previous landlords, and interviewing applicants to assess reliability, financial stability, and compatibility with your rental terms.
- Create a thorough rental agreement, which should include rent amount, payment due dates, the lease term, security deposit details, maintenance responsibilities, rules for property use (such as expectations for their use of your wifi), termination conditions, and tenant obligations.
- Your rental agreement should require tenants to carry tenant insurance for their own belongings and liability. Have them provide proof of coverage annually to confirm compliance.
Bundle and save
A great tip for both tenants and landlords is to use the same insurer for both your home and auto insurance, which can help qualify you for valuable discounts. Bundling policies is a smart way to save while ensuring consistent coverage.
Trust Lane’s Insurance for all your coverage needs
Lane’s Insurance is a leading Alberta-based insurance brokerage. We are proud to partner with progressive providers to ensure our clients have access to the most complete and up-to-date insurance products available anywhere in the province.
As a brokerage, we work for you, not the providers. When you choose Lane’s Insurance, you’re opting for a proven company with an excellent track record for customer satisfaction. Lane’s also offers outstanding claims support and expert advice that ensures all your insurance needs are met.
