Hello, I am new to the Rein website and I have learned a lot from the information on the website - Thank-you to everyone. This is my first forum post.
My daughter is just starting university in another city and so I thought rather than pay out rent, I could by a Rental Property and collect rent instead. So I bought a 1040 sq ft 3 bedroom house with a 2 bedroom basement rental suite. The idea is my daughter could live upstairs with 2 room mates paying rent and we could also rent out the 2 bedroom suite in the basement. I worked with an insurance broker and in my budget (and my initial quote) my insurance would be ~$1200 per year. Once I received the paperwork, I noticed that the quote was based on a family owned home (only my daughter upstairs) and the rental suite occupied in the basement. I asked for a re-quote with the 2 additional renters upstairs and first insurance company declined to even insure the property. A second company would insure it however the quote came back at about $2800. I started getting some additional quotes from another broker and they are highly recommending that I don't report my daughter's two room mates so that it qualifies for the lower rate policy.
My questions are:
1) Is the insurance rate of $2800 in line with what is typically paid for a 3 bedroom upstairs suite and 2 bedroom downstairs suite with a 340,000 replacement cost?
2) How big of a risk is there to not reporting the 2 upstairs room mates and going with the less expensive policy.
Is there anyone that has run into this situation? I am inclined to hold on to 'Honesty is the best policy' however I also know that customary practices and precedence can be stronger than policy.
My daughter is just starting university in another city and so I thought rather than pay out rent, I could by a Rental Property and collect rent instead. So I bought a 1040 sq ft 3 bedroom house with a 2 bedroom basement rental suite. The idea is my daughter could live upstairs with 2 room mates paying rent and we could also rent out the 2 bedroom suite in the basement. I worked with an insurance broker and in my budget (and my initial quote) my insurance would be ~$1200 per year. Once I received the paperwork, I noticed that the quote was based on a family owned home (only my daughter upstairs) and the rental suite occupied in the basement. I asked for a re-quote with the 2 additional renters upstairs and first insurance company declined to even insure the property. A second company would insure it however the quote came back at about $2800. I started getting some additional quotes from another broker and they are highly recommending that I don't report my daughter's two room mates so that it qualifies for the lower rate policy.
My questions are:
1) Is the insurance rate of $2800 in line with what is typically paid for a 3 bedroom upstairs suite and 2 bedroom downstairs suite with a 340,000 replacement cost?
2) How big of a risk is there to not reporting the 2 upstairs room mates and going with the less expensive policy.
Is there anyone that has run into this situation? I am inclined to hold on to 'Honesty is the best policy' however I also know that customary practices and precedence can be stronger than policy.
