Ontario, Canada - insurance for older house more than 3 renters?

Question

Anyone have recommendations on insurance companies in Ontario, Canada who would provide broad or basic insurance for a property that is about 100 years old and being rented to more than 3 unrelated parties?

I'm unexpectedly having a very hard time finding insurance for a duplex in Ottawa  that I am in the process of buying. After spending countless hours answering numerous questions and being on hold with numerous insurance companies and brokers, I have had two refuse me at the last minute just as I was about to sign up. The most common complaints have been that one of the units is being rented out to a group of 5 students on one lease, or that the building is 100+ years old, or random things like there have been claims from other homeowners in the area. Closing is coming up next week, so I rather urgently need to find something!

Also, I'm looking for a broad or basic coverage and can have a high deductible to save on premiums. I don't need the comprehensive policies that I have found most companies and brokers seem to default to if not push really hard. Anyone have recommendations?

https://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/ten-ways-to-cut-the-cost-of-home-insurance/article11483375/

Move down from comprehensive to broad or basic coverage …

There are three levels of home insurance coverage: basic, also sometimes called a fire policy, the mid-range broad policy and the top-of-the-line comprehensive policy. Most people go with comprehensive coverage, and you'll find that online quote providers typically default to this type of policy. But Mr. Browne said fire is your main risk. "You can live through a sewer backup, you can live through a theft, you can live through a leaky roof," he said. "But it's hard to recover from a fire."

Roy N. · Answer

@Kate H.

We have a student house which can be used as a 5-bedroom.  The occupancy by-law only allows for 4-unrelated parties.  We had a city inspector ask questions once and two of the young ladies in the house told him they were a couple, but maintained separate bedrooms for the benefit of their parents.  ... and that was the end of the questions.

Andrew Gingerich · Answer

Unfortunately, I don't have a recommendation. But what the heck is a Gee Gee?

-Warmest regards Carleton Alum.

All kidding aside best of luck. I wish I had a helpful tip here. My impression is that insurance rates are exceptionally high in Ontario. It is puzzling that you're having so much difficulty. Having said that, I have had multiple insurers pause and give me higher rates when buying a home that was built in 1945. But if the electrical has been updated, and the plumbing has been updated, and the roof is newer... than it should be easily insurable.

Robert Ganzhorn · Answer

I do understand that you aren't looking for financing. However I think what I've mentioned may be your issues. Good luck in your search.

Kate H. · Answer

Thanks, but I am looking for insurance, not financing. I will not be financing this purchase and have been telling the insurance companies that there will not be any mortgage on the property. They often like that and some include a discount for not having a mortgage.

Robert Ganzhorn · Answer

I've come across this before when arranging financing...

I might be able to shed some light on this. When unrelated individuals rent a space together it can often be considered a rooming house. A rooming house needs permits, inspections etc. Whether or not your property would be a rooming house depends on the municipality you're in. You need to check the bylaws/fire code etc. i.e. in the GTA only Toronto ever allowed rooming houses officially. anything outside of the old Toronto borders that is a rooming house is illegal..officially. doesn't mean they don't operate around universities of course. York U has a ton of them...

The other issues is the student housing. You're likely dealing with lenders that don't like them due to damage. The insurers know which areas in which Cities are usually student housing.

I suspect the above is why they asked you about the occupants.

Kate H. · Answer

Normally I start by saying I need insurance for a house I'm buying and volunteer early on that it's a duplex with tenants in one unit and the other to be occupied by me as a primary residence. Many ask details such as how many tenants and whether they are on a lease and how long of a lease. When I say 5 tenants on one lease, many tend to put me on hold and start dragging things out. And if they ask if they are related to each other, as some will, then I seem to dig myself into a deeper hole. :(

Kate H. · Answer

Actually I have been trying to get in touch with both but with no success yet. Both seem only to go through brokers, and I tried calling a few brokers, including one who is on both lists, but have been unable to reach anyone, maybe due to holiday hours. I'm going to try again tomorrow. Do you have any broker you could recommend?

Roy N. · Answer

Kate:

When you speak to the broker, keep things simple.  Just tell them it is a rental property and a duplex ... do not go into the details of how you are renting it until/unless they ask.   If it sounds like you are renting by the room, it will give some financiers and insurance underwriters heartburn.

The five-unrelated parties on a single lease may only be a problem if it violates Ottawa's occupancy bylaws.

We have many buildings that are 100+ yrs of age - and a few that are between 140 & 200 - not uncommon at this end of the country.  If you do call AP Reid, they will have you complete a questionnaire on your property to access its state of maintenance and age of its core systems.

Kate H. · Answer

I did get the impression that insurance companies can be fickle. Unfortunately so far they have been fickle in a bad way toward me, giving me a quote after asking a lot of questions and making me hold plenty, then changing their mind on the coverage or backing out right when I'm about to buy the insurance!! Looks like I'll have to keep trying Monday. And so many of them have also been really hard to reach with the holidays.

Ontario, Canada - insurance for older house more than 3 renters?

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