Renting Rooms

Cold nights freeze pipes, which is one of the reasons it’s a good idea to have someone check on your house if you’re traveling down south in the winter. It’s also one of the reasons to tell your broker if you have a student living in the basement.

Imagine you have a young man renting your basement apartment. He has a laptop, textbooks, some clothes and a guitar. As a mobile twenty-year old, he doesn’t have much furniture, so everything is on the floor—even his bed.

One sub zero morning, he wakes up in a foot of water. He comes to the main level, shivering. You take him out for some Tims and laugh together about the situation. He’s a good egg. But it turns out he doesn’t have the tenants insurance you strongly suggested. He’s been busy, with new classes and mid-terms. And he expects you to cover the cost of his losses. You’re the landlord. It’s your broken pipe that has soaked his stuff.

“That’s a thousand dollar guitar,” he says. “My parents gave it to me for my birthday, just before I left home.”

So you make a phone call and realize that you haven’t told your broker about the rental unit!

Many policies include some amount of coverage for the property of others. And according to one independent Nova Scotian adjuster, insurance companies don’t usually deny claims in cases like this one—but the potential is there.

The larger issue is non-disclosure. The cost of your home insurance is based on the risks that the insurance company thinks you face. That’s why, for example, your broker is so concerned about your heating source. Until recently, fire was the main cause of home insurance claims in Canada. (Maybe you guessed: now it’s water.)

Insurance is a conversation. The more you share with your broker, the better they can fit you with the right coverage. And conversations take time. Whether you have them on the phone or in person or online, the back and forth with different details is just part of it.