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How Taking in a Boarder Can Affect Your Home Insurance

By Conan Tobias

You may have considered taking in a student boarder to help ease your mortgage. Maybe your nephew is moving to town to attend university and you’d like to rent out a bedroom, or even your basement suite, to him to help him ease into university life. But before you move anyone into your home, make sure you do your due diligence and find out how taking in a boarder will affect your home insurance. We asked Karen McDougall of AMA Insurance a few need-to-know questions on the subject.

I’m taking in my nephew. Do I need to contact my insurance company?
Most insurance companies include family members under a policy. However, what’s considered “family” can be different from company to company, so you should reach out to your insurer just to make sure it’s okay. With AMA, your nephew would be fine.

What should I do if I take in a student who isn’t related?
You should let your insurance company know that the number of people living in your house has changed and that you’ve taken on a boarder. Property belonging to a boarder who is not related isn’t covered under your policy, so you’ll also want to advise them to get their own insurance to cover their personal property.

Keep in mind, most insurance companies will provide personal property and liability coverage for a relative or dependent under the age of 25 who is living away from home to attend school, college or university. So, the student may be covered under their parents’ policy, and it should be easy enough for their parents check with their insurer.

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What about liability, i.e., if the student is injured?
Liability coverage is to protect you when you accidentally injure someone else or damage their property, not to protect you from injury in your own home. So, if your student is family and covered by your policy, they would not get liability coverage for bodily injury (just like your policy doesn’t cover you if you injure yourself). However, if the boarder is not related to you and paying rent, and they’re injured and sue you, you would be covered for the liability in that case.

Is there a maximum number of boarders I can have?
This is one of those questions that is going to depend on your insurer. Each insurance company will have its own guidelines regarding number of boarders. At AMA, we allow a maximum of two renters who aren’t relatives. If you have more people staying than your insurance company would allow, then the premises would be considered a boarding house and commercial property policy would be required.

What if I’m renting out my basement suite?
If there’s a separate entrance and you’re charging rent, the policy needs to be changed to cover it. A rental suite is considered a separate premises, so it will need to be insured differently than your primary location, which in this case would be the main part of your house.

What could happen if I don’t tell my insurance company and something happens?
Your insurance policy is a contract, and if you do something that’s outside of the contract specifics, you might not be covered. That’s why your best bet is always to contact your insurance company before you decide to rent out premises. It’s easy enough to find out about your coverage options before you make decisions.

HOW AMA CAN HELP
For more information on home insurance, visit AMAInsurance.ca/Home or reach out to one of our advisers at 1-800-615-5897.