How much does landlord insurance cost in Ontario?

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.