What You Need to Know About Landlord Insurance for a Rooming House

Rooming houses are often a more affordable option for tenants versus renting a private apartment by offering short-term leases and shared monthly utility bills.

Rooming houses can be a boon for students, young professionals, and people living on social assistance. The private bedrooms, often furnished, and the social environment fostered by the nature of a rooming house make it an attractive choice. With 95% of Canadians considering the increasing rental costs and lack of affordable housing a serious problem, more tenants may be seeking rooming house accommodations.

For landlords, however, rooming houses, also known as boarding or multi-tenant houses, pose unique challenges and risks compared to traditional single-family rentals or apartment complexes. These residential spaces typically house three or more tenants who are unrelated in a self-contained unit or dwelling and feature common areas they share, such as kitchens, living rooms, bathrooms, and laundry facilities.

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Landlord insurance for rooming houses addresses these unique features, whereas a traditional landlord insurance policy may not. Let’s examine why:

Common Liability Risks Rooming House Landlords Face

Rooming houses typically have high turnover rates, and insurers regard an abode with three or more unrelated people residing in a shared living space as a higher risk than other types of dwellings. In general, insurance providers price landlord insurance policies based on a property’s risk. 

Among the common liability risks rooming house landlords face include:

• Injuries to tenants and visitors. Tenants or their visitors may get injured on the property or in the common areas of the rooming house caused by inadequate maintenance, faulty fixtures, or trips and falls.

• Damage to your property and contents. Whether accidental or intentional, tenants may damage your property, appliances, or furnishings in the dwelling.

• Significant fire hazards. Rooming houses usually have one kitchen shared by tenants, increasing the risk of fire from improperly using cooking appliances.

• Environmental risks that pose health hazards. Older rooming houses may contain asbestos, lead paint, or mould that can trigger illnesses in tenants.

• Wrongful eviction claims. Evicting a tenant may lead to an allegation of a wrongful eviction or legal action against you.

Essential Coverages Rooming House Landlords Should Have

Determining what coverages a landlord rooming house policy should include involves several factors about your property. Working with a licensed broker can help you navigate the complexities of being adequately insured.

Among the key coverages a rooming house landlord insurance policy should have are:

• General liability insurance. General liability covers third-party bodily injury and third-party property damage claims resulting from injuries or damages on your property.

• Commercial property insurance. Commercial property insurance covers damages to your building caused by fire, water, a natural disaster or extreme weather, theft, and vandalism.

• Business contents insurance. As part of commercial property coverage, if you have furniture in your rooming house’s common areas or bedrooms, contents coverage pays to repair or replace those items and the appliances in the dwelling if damaged.

• Rental income insurance. Rental income insurance may also be included in commercial property coverage, or you can add it to the overall policy. It may be referred to as business interruption insurance. It covers lost rent payments if your rooming house is uninhabitable following an insurable loss like a fire until repairs are made. 

• Equipment breakdown insurance. Equipment breakdown insurance covers repairing or replacing equipment such as the kitchen appliances and the rooming house HVAC system if they cease to function due to a mechanical or electrical issue.

Although there are similarities between landlord insurance for a rooming house and coverage to rent out a room in a home to a single tenant, they differ significantly as renting out a single room within a shared residence where a landlord resides tends to have lower risks, and therefore, more straightforward insurance needs.

5 Tips for Lowering Landlord Insurance Costs for a Rooming House

Being proactive minimizing risks that can lead to an insurance claim and taking measures to prevent incidents may help reduce the cost of landlord insurance. Here are five recommendations to consider: 

1. Equip the property with safety features

Outfit the property with smoke and carbon monoxide detectors, fire extinguishers, adequate lighting, and monitored video surveillance cameras.

2. Conduct regular inspections and maintenance

Ensure the property is maintained and address minor maintenance issues promptly. Regular inspections can help identify potential hazards that could lead to costly damages.

3. Carefully screen prospective tenants

Screen prospective tenants by checking employment and former landlord references, conduct a criminal background check and make sure you follow fair and legal practices to avoid allegations of discrimination.

4. Choose high insurance deductibles

Opting for high deductibles can help lower your annual premium but ensure you have the funds available to pay the deductible if you file a claim.

5. Encourage tenants to get renters insurance

A landlord insurance policy does not cover damage to your tenants’ possessions or liability risks. Encourage or insist that each tenant has renter’s insurance by including it as a condition in the lease terms.

How to Get Low-Cost Rooming House Insurance for Landlords

Thousands of Canadian landlords trust and rely on Zensurance for low-cost landlord insurance.

Get the protection your rooming house needs by filling out our online application for a free quote. Our knowledgeable brokers will shop our partner network of over 50 insurance providers to find the policy that addresses your risks and suits your budget.

With our expertise and extensive insurer network, we can help you secure low-cost insurance that provides comprehensive coverage for your rooming house.