Many Canadians live in extended family households. Whether it’s a single grandparent joining the household or multiple related families sharing a large home, it’s important to consider your home insurance. In this article, we’ll address the question of if extended family is covered under home insurance and to what extent.
The Home Itself
If you have a home insurance policy, your home should be covered. If you’re planning a renovation or addition to make your home work for your extended family, make sure you communicate with your insurer. They’ll want to be advised before the work is done and when it’s complete. This will ensure you’re covered throughout the process and your home’s replacement value is updated once they’re done.
If you are renting a portion of your home out to extended family (with a formal rental contract), you should notify your insurance company. As renting is considered commercial use, you need to tell your insurer and potentially upgrade your home insurance.
The first step is to ensure everyone living in your household is listed on the policy as an insured. This will ensure their belongings are covered in the home and if they travel, go to university, or enter a care home (just make sure you inform your insurer if any of this happens).
The second step is to ensure you have adequate insurance coverage for everyone’s property. You can estimate by creating a home inventory list with your family and getting rough estimates of the value of everything owned. Then you can choose the correct policy limits and ensure you have enough coverage.
If anyone has expensive items such as jewellery, artwork, collections or sports equipment, you may want to purchase additional coverage to ensure these items are adequately protected. Your broker can advise if this is necessary.
If you’re renting out a portion of your home with a formal rental contract, the family renting from you should purchase a renter’s insurance policy. This will cover their belongings and their personal liability.
Does extended family moving into your home impact your insurance?
Yes, extended family moving into your home can impact your insurance. You will likely need additional contents coverage due to their possessions. If they have a pet, bring a trampoline, or work from home, you may need to adjust your coverage or see higher rates. In other cases, it won’t affect your insurance at all.
Car Insurance and Extended Family
If anyone is going to drive a vehicle owned by someone else in the household, they should be added as occasional drivers to the car insurance policy. For example, if you and your partner each own a car, you should be on each other’s policy. If your mom moves in with you and can drive, she should also be added. If she doesn’t drive, there’s no need to add her.
Adding drivers can impact your car insurance rates, especially if they have a poor driving record or insurance history. However, if they do drive your vehicle and get into an accident and you haven’t added them to your policy… your claim could be denied.
When you have a multi-generational household it is important to speak to your insurance broker to ensure your insurance is adequate.