Reviewed by Daniel Mirkovic
Published April 23, 2020
The spread of COVID-19 and the measures we’re taking against it are causing daily disruptions to many people’s lives. There’s so much change and uncertainty to deal with that it’s easy to get confused and overwhelmed.
Home insurance may not be the first thing on people’s minds, but many homeowners, landlords, and tenants understandably have questions. Thankfully, we’re in a position to provide answers and help clarify how your insurance may be impacted. That’s why we’ve developed this resource on home insurance during COVID-19.
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The biggest change for most people over the past year is that they’re spending a lot more time at home. The overwhelming majority don’t have anything to worry about when it comes to home insurance during this time: their policy will protect their property as it always has.
In fact, being stuck at home may actually be a benefit from an insurance perspective: you’re there to respond quickly to problems before they cause damage.
If your home is vacant, it’s important to inform your home insurance provider promptly. If it’s unoccupied, you don’t necessarily need to inform your insurer. However, both vacancy and unoccupancy may affect your policy.
Vacant homes are those that the occupants have moved out of, with no intention of returning. Newly built or purchased homes that no one has moved into yet are also vacant. Furnished homes can still be vacant; it’s all about the intention to return or not. You must inform your insurer if your home becomes vacant.
In the current situation, vacant homes are more likely a concern for landlords; we’ll get to that in the next section.
Unoccupied homes are different from vacant homes. Measures against COVID-19 may cause some homes to be unoccupied that otherwise would not be. An unoccupied home is one that has no one living in it presently, but the occupants plan to return. For example, while you’re on vacation, your home is unoccupied but not vacant.
If you find yourself unable to return home due to travel restrictions (or other reasons), then your home will be unoccupied for longer than you’d planned.
Home insurers require a few things from homeowners during times when they leave their home unoccupied. Some insurers require that someone checks the home daily (especially in cold weather). Given current travel restrictions and physical distancing measures, that may not be easy. If your home is unexpectedly unoccupied, you should at least find someone to check it as frequently as possible and talk to your insurer to make sure they’re okay with the measures you’re taking.
Regardless, if you’re delayed in returning to your home due to COVID-19 measures, give your home insurance provider a heads-up. If you’re a Square One customer and you’re unable to return to your home as planned, let us know. We’ll work with you to make sure your home stays covered until you can return.
Additional living expenses (ALE) coverage is meant to help cover extra expenses when a home is uninhabitable due to physical damage. If for some reason you’re unable to live in your home because of COVID-19, your home insurance policy won’t be able to reimburse your living expenses.
ALE also covers you if you’re removed from your home due to an evacuation order from a civil authority. However, current COVID-19 measures like physical distancing and travel restrictions are different from evacuation orders; ALE coverage won’t respond.
If you’re finding it hard to keep up with expenses during this crisis, make sure you’ve applied for any government assistance that you qualify for.
As tenants lose their incomes and Airbnb guests cancel bookings in mass, landlords and short-term rental operators are feeling the effects of COVID-19, too.
Rental income coverage is meant to cover lost rental income when tenants can’t occupy the rental suite because it suffered physical damage caused by an insured loss. Unfortunately, the presence (or fear) of viruses is not physical damage, which means there is no insured event to trigger coverage under home insurance policies.
Landlords can’t claim lost rental income caused by common viruses like the everyday cold or flu. COVID-19 may be an extreme situation, but it’s still a virus, so it’s outside the scope of rental income insurance.
That goes for both landlords and short-term rental operators.
Rental income coverage for landlords won’t provide coverage if their tenants were laid off and can’t afford rent. Instead, landlords in such a situation should work with their tenants to find a solution. Many provinces, including Quebec, have introduced programs to help renters and landlords.
Short-term rental operators are in a particularly challenging position as the tourism industry has ground to a halt. Many have decided to find long-term tenants for their former short-term rental suites.
If your short-term rental suite has no guests now nor any scheduled in the foreseeable future, it’s effectively vacant.
Vacant properties have special considerations when it comes to home insurance. Short-term rental operators should speak with their insurer about the situation.
While insurers won’t necessarily need Airbnb hosts to formally change the occupancy on their policy to “vacant,” suite owners should still act like their rental suites are vacant and take some extra risk management steps:
Shut off the home’s water supply. Burst pipes and the resulting water damage are one of the biggest risks to an unoccupied home, especially when the weather is still hanging around (or below) the freezing mark. Even during warm weather, dishwasher and washing machine hoses can suddenly spring leaks. Shutting off the water supply effectively removes these risks. Otherwise, it would be prudent to check in on the home daily to ensure everything’s in order.
Make the home look lived in. Unfortunately, burglary doesn’t stop just because we’re dealing with a pandemic. If your rental home is a house (or similar property with street access) it’s worth taking some steps to hide its vacancy and protect it from burglars:
Amid an unprecedented wave of layoffs and reduced hours, tenants across Canada are worried about how they’re going to pay their rent during this crisis (and what will happen if they can’t).
Losing your job is stressful at the best of times; losing your job during a global pandemic is that much worse.
Fortunately, the Government of Canada and most of the provincial governments introduced plans to help tenants during this time. For example, the Canada Emergency Response Benefit was introduced in 2020. Several provinces introduced additional benefits. And, most provinces halted rent increases and evictions due to unpaid rent.
As the crisis continues, governments at all levels are introducing new measures. Make sure to stay up-to-date on what your province is doing to help tenants, as new options may become available.
Much like what we discussed above in the homeowners section, tenants who have home insurance policies should not have any problems with their coverage due to COVID-19. If you continue to pay your premiums, your tenant insurance policy will function like normal.
That being said, if you can’t return home due to COVID-19 travel restrictions, your home will be unoccupied as a result. The issues around unoccupied homes are much the same for tenants as they are for homeowners. We broke down those issues in the unoccupied homes section near the top of this page, but the short version is: take the usual steps your insurer requires when your home is unoccupied, and talk to your insurance provider about anything you’re not sure of. They’ll let you know what you need to do if you can’t return home as you planned.
Some tenants have asked if their Additional Living Expenses coverage can respond to COVID-19-related issues. That, too, is the same as the homeowners section above: unfortunately, you can’t claim Additional Living Expenses because of COVID-19 (or any global pandemic).
Given the disruptions to every industry, it is quite possible that repairs to your damaged property might be delayed.
Additionally, you may not wish to have contractors in your home while physical distancing measures are in place.
If repairs to your home are delayed because of COVID-19, Square One will work with you to find the best way to bring your claim to a conclusion.
It’s a time of incredible uncertainty for everyone. For more information, or if you have a questions about your own home insurance, contact your home insurance provider.
Want to learn more? Visit our Home Insurance Basics resource centre for dozens of helpful articles to guide you through the ins and outs of home insurance. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
About the expert: Daniel Mirkovic
A co-founder of Square One with 25 years of experience in the insurance industry, Daniel was previously vice president of the insurance and travel divisions at the British Columbia Automobile Association. Daniel has a bachelor of commerce and a Master of Business Administration (MBA) from the Sauder School of Business at the University of British Columbia. He holds a Canadian Accredited Insurance Broker (CAIB) designation and a general insurance license level 3 in BC, Alberta, Saskatchewan, Manitoba and Ontario.
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