Secondary suites complicate insurance coverage

The City of Penticton has approved 41 secondary suites since 2009

If you have a secondary suite, legal or illegal, it’s best to make sure your home insurance company knows about it.

According to some estimates, nearly one-quarter of B.C. residents help make the monthly mortgage payments by renting out a secondary suite. But even those who have gone through the process to create a legal suite may forget to notify their insurance company, while those with illegal suites may be even more reluctant, fearing that the information may be passed on to the city.

“We ask them specifically. We don’t ask them if they are illegal suites or not,” said Peggy Bird of Valley First Insurance.

While the legality of the suite doesn’t matter, other consequences of not informing an insurance broker about the presence of a secondary suite can be costly for a homeowner.

“In the event of a claim, if they haven’t told about it, then the insurance company can decline. It depends on the company,” said Bird.

The Canada Mortgage and Housing Corporation agrees that insurance companies need to be notified. Additional occupants, cooking facilities and living space may increase the potential for an accident to occur, all of which could affect the insurance premium.

“The situations vary, so you really need to talk to your broker,” said Bird. “That is something we are pushing with our clients all the time. Your broker is more than happy to give you the proper information so you are not in a situation where you could be denied claim coverage.”

And, she continued, that information is never passed on to anyone else.

“There are privacy issues. They don’t pass any information on,” said Bird. “Whatever it is, it is confidential between you and your broker.”

“To my knowledge, we haven’t had any inquiries from insurance companies,” confirmed Anthony Haddad, director of development services for Penticton.

He said they are far more likely to discover illegal secondary suites when a home is sold and the city receives a request for a file search on permit approvals or other historical records regarding a property.

“We are either following up through complaints and enforcement or people coming in to make them legal through the building permit process,” said Haddad.

There is no telling how many secondary suites there actually are in Penticton, but in Vancouver and Toronto, they are estimated to make up close to a fifth of the rental stock, according to the CMHC.

Haddad said the City of Penticton approved 41 secondary suites between 2009 and 2012. Of those, 19 were in new single-family buildings which included a secondary suite, while 22 were legacy suites, those were existing buildings that were approved before 2009, where they converted basements into suites.

“We had a grace period, I think it was a year or so in 2009, and we received eight permits under the legacy suite program and the rest we had in 2010-2012,” said Haddad.

To legalize a secondary suite, Haddad said they require a building permit, that goes through a review and approval process.

“We also put a new address to it, so unit No. 2 or “A” or whatever, to identify it for emergency services,” said Haddad. “But in terms of insurance, that’s up to the property owner to take care of.”


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Okanagan Clinical Trials is looking at gut bacteria as a way of slowing down the development of Alzheimer’s. (Alzheimer Society of B.C. photo)
Okanagan study looking for volunteers of people diagnosed with Alzheimer’s

The study is looking at how gut bacteria may help slow the disease

Penticton City Hall. (File photo)
City of Penticton seeking grants to fund public washroom improvements

The grant would fund washrooms at Gyro Park and Riverside Park

Oliver Elementary School
Former Oliver PAC treasurer charged with fraud returns to court

Belinda Yorke will be in court to fix a date for trial in February

Penticton’s Burdock House supportive housing on Winnipeg St. is one of the B.C. Housing buildings the City of Penticton wants audited. (File photo)
City of Penticton seeks audit of BC Housing supportive housing units

BC Housing recently announced plans to construct a new supportive housing unit in the city

A GoFundMe campaign for a display of unity quickly received donations. The initiative, by the Lekhi family of Summerland, began days after their home had been targeted by vandalism and racist graffiti. Discussions are now taking place to determine where an art piece promoting unity will be located. (
Artwork in Summerland to show message of inclusivity

Initiative began following vandalism of Indo-Canadian family’s home in July

Dr. Penny Ballem, a former deputy health minister, discusses her role in leading B.C.’s COVID-19 vaccination program, at the B.C. legislature, Jan. 22, 2021. (B.C. government)
B.C. holds steady with 407 new COVID-19 cases Tuesday

14 deaths, no new outbreaks in the health care system

Vernon now has an approved 13 cannabis shops in town. (Jennifer Smith - Morning Star)
Vernon, the ‘Pot capital of B.C.’ greenlights two new stores downtown

Two more shops, within 240 metres, approved, despite neighbouring businesses opposition

11 more cases of COVID-19 have been linked to a cluster on Big White Mountain. Pictured above is TELUS park at Big White Ski Resort, Jan. 26. (Big White Ski Resort)
11 more cases of COVID-19 linked to Big White cluster

This brings the total case count to 225, according to health authorities in a Tuesday update

Jonathon Muzychka and Dean Reber are wanted on Canada-wide warrants. (Courtesy of Victoria Police Department)
Convicted killer, robber at large after failing to return to facility: Victoria police

Dean Reber, 60, and Jonathon Muzychka, 43, may be together

Two fibreglass bees were stolen from Vernon’s Planet Bee Honey Farm Nov. 22, 2020. (Facebook)
Stolen bee returned to Vernon honey farm

Two months after thieves buzzed off with two bee sculptures, public tips led police one of them

B.C. Premier John Horgan listens during a postelection news conference in Vancouver on Sunday, Oct. 25, 2020. THE CANADIAN PRESS/Darryl Dyck
30% of B.C. recovery benefit applications held up in manual review

The province says 150 staff have been reassigned to help with manually reviewing applications

Adam Dergazarian, bottom center, pays his respect for Kobe Bryant and his daughter, Gianna, in front of a mural painted by artist Louie Sloe Palsino, Tuesday, Jan. 26, 2021, in Los Angeles. (AP Photo/Jae C. Hong)
Kobe Bryant’s presence remains strong a year after his death

Tuesday marks the grim anniversary of the crash that took their lives

Alexandra “Annabelle” Lee and her grandpa Bryan Weightman enjoyed a shopping spree at the Sicamous Askew’s foods location after Weightman won a draw for a gift card. (Submitted)
Sicamous seven-year-old fills grandparents’ shopping cart after contest win

When her grandparents won an Askew’s Foods gift card, Alexandra Lee got to handle the shopping

Surrey RCMP are investigating after a pedestrian was struck and killed at 183 Street and Highway 10 Friday night. (File photo)

Most Read