I received a call today from a client saying they were considering upgrading their home from a townhome in Abbotsford to a newer home with a suite (either legal or unauthorized). The first question they asked was a great one.
They wondered if you had a suite that was unauthorized and you put a tenant in that suite who then had a fire or flood that destroyed your home, would the insurance company be able to void your insurance.
The answer is no, but you may not have the same home rebuilt the way it was…
In the case of an unauthorized suite the home would be rebuilt to a fully finished state but if there was a suite that did not conform to the city by-laws, then the area where the suite was would be finished but without a kitchen.
If the home has a legal suite, it would be rebuilt to the same level as before including the kitchen.
When applying for insurance on a home with an unauthorized suite, it is always good practice to do the following:
- Let the insurance company know of the suite, even if you plan to not have a tenant there
- If you have a tenant, insure they have tenants/content insurance
The cost of insurance on a home with a suite (whether legal or unauthorized) is roughly a 10% surcharge.