Canadian Underwriter

About one-quarter of B.C. homes have rental suites or converted coach houses

June 4, 2012   by Canadian Underwriter

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Nearly one-quarter of B.C. house owners rent out a portion of their home to non-family members, including basement suites in the residence and garages converted to “coach houses,” notes new research conducted by Square One Insurance.

Square One surveyed 850 B.C. homeowners over a period of eight months, with almost 25% reporting that they rented out space to non-family members.

The findings reinforce a 2009 study completed by the City of Vancouver, which estimated that between 23% and 27% of single-family houses have suites.

“The high percentage of people renting out a portion of their houses is understandable given today’s economy and the high price of real estate across the province,” says Daniel Mirkovic, Square One’s president and CEO.

“In fact, we suspect the actual percentage is considerably higher. Some people may be reluctant to disclose this information to their home insurance provider if they haven’t secured necessary municipal approvals and permits.”

But while mortgage-helpers are understandable, homeowners should be aware of potential insurance implications, Square One notes. In particular:

• Most insurance policies require homeowners to advise them within a certain period of time of any improvements (like rental suites) over a certain amount. If they fail to do so, they may find themselves underinsured in the event of a loss.

• The policy may have been sold to homeowners based on the fact that their houses were single-family dwellings. If a house becomes a two-family dwelling, and if the homeowner neglects to advise his or her insurance agent, the policy could be invalid.

• More people living in the home may mean an increased liability risk. If a tenant or a guest of the tenant trips on a ladder in the backyard or slips on an icy step, the homeowner can be sued for injuries.

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