Landlord Insurance in Canada: What It Covers
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Landlord insurance is the policy you need when you rent out a property you own, whether it is a basement suite, a duplex, a condo, or a whole house. A standard homeowner policy assumes you live in the home. Once a tenant moves in, the risk changes, and your insurer needs to know. This guide explains what landlord insurance covers in Canada, how it differs from tenant insurance, and what to check before you sign a lease. For the rest of our coverage guides, start at our insurance hub.
The short version: your tenant's policy protects the tenant's belongings and liability, not your building. Your landlord policy protects the building, your liability as an owner, and often the rent you lose after a covered claim.
What is landlord insurance?
Landlord insurance is property insurance for a home that you own but that someone else occupies under a lease. Insurers sell it under several names: rental property insurance, landlord insurance, or a "rented dwelling" policy. The structure looks like a home insurance policy, but the wording reflects that a tenant, not you, lives there.
The Insurance Bureau of Canada (IBC) describes the core of landlord coverage in plain terms: it replaces lost rental income if tenants must move out after an insured loss, and it covers defence costs if someone sues you (IBC, May 22, 2025).
Who needs it
You need a landlord policy, or a landlord endorsement, in these common situations:
- You rent out a whole house or condo: you no longer live there, so a homeowner policy no longer fits.
- You rent a basement or secondary suite: you live in the home, but part of it is leased to a tenant.
- You own a duplex or triplex: you may live in one unit and rent the others.
- You rent on a short-term platform: short stays change your risk profile, and the IBC notes that listing a home on a home-sharing app has insurance implications.
In each case, tell your insurer before the tenant moves in, and keep a written record of that call.
What landlord insurance covers
A landlord policy combines several protections. The exact list depends on the insurer and the form you choose, so read the policy wording before you buy.
The building
The policy pays to repair or rebuild the structure after an insured loss, such as a fire or a windstorm. As with a regular home insurance policy, the amount should reflect the cost to rebuild, not the market value of the property.
Loss of rental income
If a covered loss makes the unit unlivable, the tenant usually stops paying rent while repairs happen. Loss of rental income coverage, sometimes called "fair rental value", replaces that rent for a limited period. This protection matters most when the rent covers your mortgage payment.
Landlord liability
Liability coverage protects you if a tenant or a visitor is injured because of a problem with the property you are responsible for, such as a broken stair railing. It also covers legal defence costs. Ask for the price of a higher limit before you settle on the minimum.
Your own contents
Appliances, furniture, and equipment that you supply with the unit belong to you, not the tenant. A landlord policy can cover them. The tenant's own belongings are not covered by your policy.
Landlord insurance vs tenant insurance
The two policies cover different people and different property. They work together; one does not replace the other.
| Coverage | Landlord policy (owner) | Tenant policy (renter) |
|---|---|---|
| Building structure | Yes | No |
| Owner's appliances and furnishings | Yes, if listed | No |
| Tenant's belongings | No | Yes |
| Liability | Owner's liability as landlord | Tenant's personal liability |
| Lost income or extra costs after a loss | Lost rent (rental income coverage) | Extra living expenses |
| Who buys it | Property owner | Tenant |
Many landlords ask tenants to carry tenant insurance and to show proof each year. Whether a landlord can make it a lease condition depends on the province. In Ontario, the standard lease lets the landlord and the tenant agree on whether the tenant must carry liability insurance, and a tenant who agreed must show proof when asked (Ontario standard lease guide). Our guide on whether a landlord can require tenant insurance covers the rules, and our article on tenant insurance and water damage explains what the tenant's policy pays when a pipe bursts.
What landlord insurance often excludes
Exclusions vary by insurer, but some gaps come up often. Check each one against your policy wording.
- Undisclosed tenancy: renting out the home without telling the insurer can void the policy.
- Tenant belongings: your policy does not cover what the tenant owns.
- Wear and tear: gradual deterioration and poor maintenance are generally excluded.
- Sewer backup and overland water: usually covered only through optional endorsements.
- Vacancy: a unit left empty for a long period between tenants can trigger restrictions in the wording.
- Short-term stays: home-sharing can fall outside a standard landlord or homeowner form.
Water damage deserves a second look. Sewer backup and overland water are usually optional endorsements on a regular home policy, and the same logic applies to a rental property. According to the IBC, sewer backup damage is only covered if you have bought that specific optional coverage, and flood coverage is optional as well.
How much landlord insurance costs
No public agency publishes an average landlord insurance premium in Canada, and we did not find one at a primary source as of October 18, 2026. We therefore do not quote an average. What we can say is which factors move the price, so you can compare quotes on equal terms:
- Rebuild cost: the size, age, and construction of the building.
- Number of units: a single suite costs less to insure than a triplex.
- Type of tenancy: long-term leases are priced differently from short-term rentals.
- Claims history: past water or fire claims raise premiums.
- Deductible: a higher deductible lowers the premium but raises what you pay after a claim.
- Endorsements: sewer backup, overland water, and rental income limits add cost.
Rental income is taxable, and insurance premiums on a rental property are generally a deductible rental expense. The Canada Revenue Agency's rental income guide lists the expenses you can claim. If you are weighing whether to buy a property to rent, our rent vs buy calculator helps you test the numbers.
How to buy the right policy
Start with the facts the insurer will ask for. Then compare at least three quotes with the same limits and deductibles.
- Gather the property details: year built, roof age, heating, plumbing, and electrical updates.
- Describe the tenancy honestly: long-term lease, room rental, or short-term stays.
- Choose a rebuild amount, a liability limit, and a rental income period.
- Ask which water endorsements are available at your address.
- Ask the tenant to carry tenant insurance and to show proof of coverage each year.
A broker can compare several insurers at once. Our page on getting home insurance quotes explains how quotes work, and our insurance comparison tool lets you see options side by side.
Conclusion
Landlord insurance protects what a tenant's policy cannot: your building, your liability as an owner, and your rental income after a covered loss. The most expensive mistake is the silent one, renting out a home under a homeowner policy without telling the insurer. Call your insurer before the lease starts, compare quotes with identical limits, and review the policy every year as rents and rebuild costs change.
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Frequently asked questions about landlord insurance
Is landlord insurance mandatory in Canada?
In general, no law requires you to insure a rental property you own. However, if the property has a mortgage, your lender will almost always require property insurance that reflects how the home is used. Renting the home out under a homeowner policy can give the insurer grounds to deny a claim. Our insurance hub explains the main policy types, and our guide on what home insurance is covers the basics.
Does my home insurance cover me if I rent out my basement?
Not automatically. A homeowner policy is priced for a home you occupy, and a tenant changes the risk. Tell your insurer before the tenant moves in; it may add an endorsement or move you to a different policy form. Ask your tenant to buy their own policy, as described in our guide on whether a landlord can require tenant insurance.
What is the difference between landlord and tenant insurance?
Landlord insurance covers the building, the owner's liability, and the owner's lost rent. Tenant insurance covers the tenant's belongings, the tenant's liability, and the tenant's extra living costs after a covered loss. Each person needs their own policy. Our article on tenant insurance costs shows what the tenant side looks like.
Does landlord insurance cover damage caused by a tenant?
It depends on the cause and the wording. Sudden accidental damage, such as a fire started by a tenant, is often covered. Wear and tear and gradual neglect are usually excluded, and intentional damage is treated differently from one insurer to another. Ask your insurer for the exact wording, and keep move-in photos and inspection reports. For a broader view of policy types, see our insurance comparison tool.
Can I deduct landlord insurance premiums from my taxes?
Insurance on a rental property is generally a deductible rental expense for the period it covers. If you rent part of the home you live in, you can usually deduct only the share that relates to the rented area. The Canada Revenue Agency's rental income guide sets out the rules. Our taxes section covers related topics.
Does landlord insurance cover short-term rentals like Airbnb?
Do not assume so. The IBC notes that listing your home on a home-sharing app has insurance implications, and insurers handle short stays differently: some offer an endorsement, others require a different policy. Tell your insurer how often you rent and for how long before you list the property. Compare options with our insurance comparison tool.
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