Garden Suite Insurance in Ontario during the build and after the keys
Your home policy was written for one house and one household. A garden suite changes both. The detached structures coverage on a typical policy is often only 10 to 25 percent of the house limit, which may not rebuild a $250,000 suite. Here is what to fix, and when.
At a glance
General information, not insurance advice. Policies differ. Talk to a licensed Ontario broker before you build and before anyone moves in.
Insure a garden suite in three stages. During construction, get builder’s risk coverage, because a regular home policy may not cover a building under construction. When it is finished, raise your detached structures limit to full replacement cost or buy a separate suite policy. If you rent it, add landlord coverage and have the tenant carry their own policy.
Your Policy Has No Idea you just built a house out back
Insurance companies price what they think is on your lot. If you told them about a shed in 2015 and you now have a heated, plumbed, $280,000 one-bedroom suite with a tenant in it, they are pricing the wrong risk. You find that out at claim time, which is the worst possible time.
Most home policies include coverage for detached structures like garages and sheds. Ratehub notes it usually covers 10 to 25 percent of your total home coverage, and BrokerLink says many insurers default to an amount near 10 percent. On a $700,000 dwelling limit, 10 percent is $70,000. That rebuilds a nice garage. It does not rebuild a garden suite.
The fix is not complicated. It is a phone call to your broker at each stage, and a bit of extra premium. The expensive part is forgetting to make the call.
What Coverage You Need and when you need it
| Stage | Coverage | Who usually buys it | Watch for |
|---|---|---|---|
| Before you dig | Notify your home insurer of the project | Owner | Some insurers require builder’s risk before work starts |
| Construction | Builder’s risk (course of construction): structure and materials on site | Owner, sometimes the contractor | Does not cover tools or bad workmanship; add liability, sewer backup as needed |
| Construction | Contractor’s liability insurance and WSIB coverage | Each contractor | Get a certificate of insurance and a WSIB clearance before they start |
| Finished, family living there | Raise detached structures limit to full replacement cost, or a separate suite policy | Owner | Tell the insurer who lives there; family members may need to be listed |
| Finished, rented | Landlord endorsement or landlord policy: building, your appliances, liability, loss of rent | Owner | Renting both units and living elsewhere changes the policy again |
| Rented | Tenant insurance: their belongings and their liability | Tenant | Must be agreed in the lease if you want to require liability coverage |
| Empty | Vacancy permission or vacant property coverage | Owner | Burst pipes in an empty suite are a classic denied claim |
Last checked October 2026 · Source: Ratehub builder’s risk guide, Rates.ca garden suite insurance guide (Mar 2024), Ontario.ca standard lease guide
Builder’s Risk covers the half-built suite
A building under construction is a different risk. It has no doors that lock, stacks of lumber that walk away at night, and propane heaters running on cold days. Ratehub puts it bluntly: a regular home policy may not cover damage to a building under construction, and home insurers generally require builder’s risk for new builds and larger projects.
Builder’s risk, also called course of construction insurance, covers the structure and materials on site against things like fire, wind and theft. It does not cover the contractor’s tools, and it does not fix bad workmanship. Ratehub’s Ontario example puts a six-month new house build at roughly $4,000 to $6,000. A small garden suite may cost less to cover, but get a real quote.
Who buys it?
Usually the owner, though some contractors include it. Ask in writing. If your contract says the builder carries it, ask for the certificate. If the contract says nothing, assume nobody does.
Check your contractors too
Every contractor on your site should carry liability insurance. Ask for a certificate of insurance before they start, and a WSIB clearance certificate so you are not on the hook if one of their workers is hurt on your property. Our own crews are insured. A contractor who gets vague when you ask for paperwork is telling you something.
Know the whole budget, insurance included
Our $399 + HST Garden Suite Feasibility Report gives you the rules, servicing, a realistic cost range and the next steps for your lot, in 48 hours. Credited toward permit plans or a build.
Family or Tenant changes the policy
A parent or adult child living there
If a family member is already covered under your policy, coverage may extend to the suite. Rates.ca gives the example of an adult child paying board. A parent moving into a new suite should be reported to your insurer, and the added space and value may raise your premium. Parents often keep their own policy for their belongings and liability. Do not assume; ask.
Renting to a tenant
Once a stranger pays rent, you are a landlord. Rates.ca, quoting the Insurance Bureau of Canada, lists what a landlord policy covers: the structure, your belongings in the unit, liability, and loss of rental income if the suite becomes unlivable after an insured loss. It does not cover the tenant’s belongings. If you live in the main house and rent the suite, an endorsement on your home policy may do the job.
If you rent both the house and the suite and live elsewhere, Ratehub notes the insurer may treat it as one rented dwelling with two units and two families. That is a different policy entirely.
Can I make my tenant buy insurance?
Only if it is in the lease. Ontario’s standard lease guide says a landlord and tenant can agree whether the tenant must have liability insurance, and if the landlord asks for proof, the tenant must provide it. Contents insurance stays up to the tenant. Put the requirement in the lease from day one. Adding it later is a negotiation you will lose.
Short-term rentals
Renting nightly is a commercial-style risk and usually needs its own endorsement, if your insurer will cover it at all. Many towns restrict it anyway, and the CMHC suite refinance bars rentals under 90 days. See our short-term rental rules guide before you list it.
Six Ways to Get a claim denied
- Never telling the insurer the suite exists. A heated, plumbed dwelling is not a shed. If they don’t know about it, don’t count on them paying for it.
- Leaving the detached limit at the default. Ten percent of the house limit, against a suite that costs a quarter of a million dollars to rebuild.
- Leaving it empty without permission. Between tenants, or waiting for Mom to sell her house. Rates.ca recommends telling the insurer, getting permission or vacant property cover, and shutting off the water. Water is the usual culprit.
- Building without a permit. An unpermitted unit gives the insurer an easy question to ask after a fire. Build it legally and keep the final inspection.
- Renting nightly on a homeowner policy. If the policy does not mention short-term rental, assume it doesn’t cover it.
- Adding a wood stove without telling anyone. Solid-fuel heating is a standard question on home insurance applications. Answer it honestly, and have the install inspected.
Questions to Ask your broker
Ontario insurance brokers are licensed through RIBO. A good one will answer all of these in one call.
Do I need builder’s risk, and who should hold it?
Ask before construction starts. Get the answer in writing and match it to your building contract.
What is my detached structures limit, in dollars?
Not as a percentage. Compare it with the replacement cost of the suite, including foundation and servicing.
Is a separate suite policy cheaper or better?
Some insurers offer one. It means two premiums, but it can protect the main house policy from changes.
What changes if a parent moves in? A tenant?
Get both answers. Plans change, and you want to know the cost of each before you decide.
How long can the suite sit empty?
Find out the vacancy limit on your policy and what you must do to keep coverage while it is empty.
Does the construction type change my rate?
Ask whether an ICF or concrete suite, a monitored alarm or a water leak sensor changes your premium. It costs nothing to ask.
Building in Simcoe County or Georgian Bay? ICFhome.ca is insured and Tarion-approved, and we will tell your broker exactly what is being built so the policy matches the building.
Plan the suite before you plan the policy
The $399 + HST Lot Report tells you what your town allows, what servicing will cost and a realistic all-in budget, in 48 hours. Then you know what you are insuring.
Garden Suite Insurance questions people ask
How do I insure a garden suite in Ontario?
Tell your insurer before construction starts and arrange builder’s risk coverage for the build. When it is finished, either raise the detached structures limit on your home policy to the suite’s full replacement cost or buy a separate suite policy. If you rent it, add landlord coverage, and have the tenant carry their own policy.
Does my home insurance cover a detached garden suite?
Partly, at best. Most home policies include detached structures coverage, often 10 to 25 percent of the dwelling limit, and many default near 10 percent. That is usually far below what it costs to rebuild a garden suite. Ask your broker to raise the limit to full replacement cost or quote a separate suite policy.
Do I need builder’s risk insurance for a garden suite?
In most cases, yes. A regular home policy may not cover a building under construction, and home insurers generally require builder’s risk for new builds and larger projects. It covers the structure and materials against fire, wind and theft. Ratehub’s Ontario example for a six-month new house build is roughly $4,000 to $6,000; a small suite may cost less.
What insurance do I need if I rent out my garden suite?
Landlord coverage, either as an endorsement on your home policy if you live in the main house, or as a landlord policy. It typically covers the building, your appliances and furnishings, liability and loss of rental income after an insured loss. It does not cover the tenant’s belongings; they need their own tenant insurance.
Can I require my tenant to have insurance in Ontario?
Yes, if it is agreed in the lease. Ontario’s standard lease guide says a landlord and tenant can agree whether the tenant must have liability insurance, and the tenant must show proof if asked. Contents insurance is up to the tenant. Put the requirement in the lease before the tenant signs.
Does my insurance cover the suite while it sits empty?
Not automatically. Many policies limit coverage after a period of vacancy. Tell your insurer when the suite will be empty, get permission or vacant property coverage, and shut off the water. A burst pipe in an empty suite is a classic way to end up arguing with an adjuster.
Do I need to tell my insurer if my parent moves into the garden suite?
Yes. The added living space and value can change your premium, and the insurer needs to know who lives there. A family member already covered on your policy may be covered in the suite, but confirm it. Many parents also keep their own policy for their belongings and liability.
How much does garden suite insurance cost?
It depends on the suite’s replacement cost, location, who lives there and your insurer. A 2022 Ratehub article suggested budgeting from about $75 a month, but rates have moved since. Get quotes for both a raised detached limit and a separate suite policy, and ask whether alarms or leak sensors lower the price.