Occupancy has a particular meaning in home insurance. We reviewed Ontario’s Residential Tenancies Act, CMHC’s National Occupancy Standard explanation, the Insurance Bureau of Canada’s room-rental insurance guide, and IBC’s occupancy glossary to prepare this article.
It’s critical to understand how your insurer defines occupancy, vacancy and temporary unoccupancy, and ask in writing to confirm the details.
How Do Ontario Occupancy Changes Affect Home Insurance?
Changes in property occupancy can affect eligibility, premiums, conditions, exclusions, or the policy type. If you’re thinking of renting out a bedroom or basement suite, leaving the property empty, converting the place into a short-term rental, moving out, undertaking major renovations, or changing who regularly lives there, tell your insurer or broker first.
There is no universal 30-day rule that automatically invalidates a policy, but vacancy can still affect coverage. Different policies and insurers may have different requirements. Insurers may allow some changes with no impact; others may change the terms of coverage, adjust the price accordingly, exclude certain perils, require a different policy, or refer the risk elsewhere.
This depends on what was described in your application, the policy contract, endorsements, timing and the materiality of any undisclosed fact.
How Occupancy Type Changes Home Insurance
| Actual use | Describe it this way. | Question for the insurer |
|---|---|---|
| You live there full time. | Owner-occupied principal residence | Who else is insured, and are any rooms or units rented? |
| You live there with a paying roomer or tenant. | Owner-occupied with a roomer, boarder or rented unit | Is an endorsement or landlord form required? |
| Family lives there, and you do not. | Family-occupied, with the relationship and payment arrangement | Is this eligible under a homeowner, secondary or rental form? |
| A long-term tenant has the whole home. | Non-owner-occupied long-term rental | Which landlord property, liability and rental-income coverage applies? |
| Guests rotate through short stays. | A short-term rental or home-sharing arrangement may require details about how often the home is rented and which platform is used. | Does the policy cover hosting, and under what conditions? |
| No one is there, but someone plans to return. | Temporarily unoccupied, with dates and reason | Which inspection, heat, water and absence conditions apply? |
| Everyone has left with no plan to return. | Vacant, with the date it began and plan | Is a vacancy permit or separate policy available, and what remains covered? |
| The home is empty during construction. | Renovation or construction occupancy, with scope and contractor | Does the project require a renovation or builder’s-risk form? |
Read More: Learn About Home Insurance in Ontario
Why You Must Check The Policy’s Vacancy Deadline
Ontario law does not require coverage to be cancelled after thirty days, although many policies use that benchmark and others have different periods or conditions. Check your policy to confirm what is permitted, when vacancy provisions apply, how vacancy is defined and what happens to coverage.
Some clauses refer to particular perils. Some refer to vacancy, and some refer to unoccupancy, with IBC defining vacancy as when occupants have moved out with no intention of returning or new residents have not yet moved in, distinguishing that from a temporarily unoccupied home.
Having furniture doesn’t necessarily mean your home is not vacant. Consider several factors, including actual use and renovation status, intent, utilities, and whether people are scheduled to move in. Always ask for clarification if anything is unclear.
| Empty-home situation | Date to report | Details to provide |
|---|---|---|
| Between tenants | Before the outgoing tenant leaves | Move-out date, expected new tenant, heat, inspections and repairs |
| Listed for sale after you move | Before your move-out date | Closing status, staging, utilities, visits and security |
| Estate property | As soon as the representative controls the insurance file | Death, occupants, probate contact, maintenance and sale plan |
| Major renovation | Before work and before occupants leave | Scope, permits, contractor, utilities and expected return date |
| Extended travel or hospital stay | Before the policy’s absence conditions are reached | Return intent, home checks, heat and water precautions |
Read More: See When a Vacant Home Needs Different Insurance
Occupancy Changes That Can Create Coverage Problems
Insurance occupancy is different from the legal classification of a tenant. In Ontario, for example, the Residential Tenancies Act, or the RTA, defines tenancy agreements as written, oral or implied. Broadly speaking, the RTA considers a person paying rent for the right to occupy a rental unit to be a tenant. So, tenancies don’t just include those with a written lease approved by the landlord.
However, the Act has exclusions and specific considerations depending on the nature of the relationship, including, for instance, whether the occupant shares a kitchen or bathroom with the owner or certain family members. So, you cannot simply look to labels such as roommate, guest, or occupant to determine rights. Instead, get Ontario tenancy advice based on:
- who owns the home
- who gave them the right to occupy the home
- who they share facilities with
- the nature of any payments
CMHC’s National Occupancy Standard is just one measure used for research purposes to identify whether a home is suitable for a household. CMHC notes that the NOS is not a rule for deciding whether a household may rent or occupy a dwelling and must not be used to restrict access to housing.
Read More: Review the Insurance Risks of a Basement Suite
Occupancy Changes To Report To Your Insurer
| Change | Why the risk description changes | Ask this before it happens. |
|---|---|---|
| Adult child or relative moves in | Household membership and insured-person status may change. | Are their contents and liability insured under this form? |
| Roommate begins paying you. | Some changes in occupancy may create a roomer, boarder or tenancy exposure. | How should the occupancy and payment arrangement be recorded? |
| Basement unit is rented. | A self-contained household, separate kitchen or entrance could affect liability and how the insurer underwrites the home. | Does the insurer require proof of permits or a rental endorsement? |
| Short-term listing goes live. | A long-term tenant differs from short-term guests who come and go or use the property in a business-like way. | Are occasional and frequent hosting treated differently? |
| You move out, and tenants stay. | Report to your insurer when the property changes from owner-occupied to non-owner-occupied. | When must the landlord policy begin? |
| Home is empty for repairs. | No regular occupant may be present to detect loss. | Is it vacant, unoccupied or under renovation in this policy? |
Read More: See How Multiple Tenants Can Affect Home Insurance
What To Do Before And After An Occupancy Change
- Keep a list of who is living in your home, their relationship to the owner, whether they pay, what area they control and expected start and end dates.
- Inform your broker or insurer of each occupancy change before it happens. Give details about a long-term rental, rented room, home sharing, renovation, vacancy or extended absence.
- Be prepared to answer questions about unit count, kitchens, separate entrances, leases, permits, short-term platforms, home business, pets, utilities and property checks.
- Ask about the policy or endorsement that may apply, deductibles, inspection requirements, heating conditions, a vacancy permit, and the effective date.
- Keep copies of emails, the application change, the endorsement and the revised declarations page. Check for accuracy of the named insured, occupancy and mailing address.