Does renters insurance cover a subletter?
A sublet (also called a sublease) is when a leaseholder leases a property to a subtenant for a specific period of time.
In essence, you can sublet your place while on extended leave, or sublet an extra room while you’re still living there. Your intention is usually to return to your rental space at some point and continue your tenancy.
You may leave all your possessions in the rented space, or at least some of them, since you’re only planning to be away for a fixed term. So how would renters insurance work during a sublet?
Due diligence
As it is written in law (The Residential Tenancies Act of Ontario, in this instance): “A tenant may sublet a rental unit to another person with the consent of the landlord.” That last part is crucial.
If you do not notify your landlord of the subtenancy, you are in effect breaking the law and your landlord has the right to evict you based on those grounds. Your landlord, legally, cannot "arbitrarily" refuse the subtenancy if it is “reasonable”. Further, it is illegal for you to profit from the sublet. (Review your provincial tenancy acts for specific wording on sublets if you do not live in Ontario.)
After you’ve hashed it out with your landlord, your next move should be evaluating your renters insurance coverage.
Renters insurance and a sublease
If you’re intending to leave some of your things in your apartment (furniture, electronics, collectibles) you’re going to want to contact your insurance provider immediately to let them know some part of your residency is changing.
Subletting once will be treated differently than if you’re a frequent subletter. The more often you’re asking your insurer to cover a sublet, the riskier you become to insure. They may suggest you take out a policy that resembles a landlord’s, since you may be treated as if you’re operating your rental as a business. Operating a business under a renters insurance policy is a no-go.
If there’s always someone new in your home, they have the ability to steal your things. That’s why theft protection may not work if something goes missing while you’re away. Your premiums are also liable to jump.
Whose policy is it anyway?
Renters insurance only protects the contents and property of those listed as ‘policyholders.’ If your subletter or additional roommate is not listed as an additional insured on the policy (or is not a domestic partner or spouse of yours) then they will not be covered by that policy.
Always check with your insurance company
All policies are different; it is essential to get advice from your insurer in order to avoid a denied claim.
We would also suggest that the person subletting your apartment takes out their own renters insurance policy, so that both of your possessions are covered. The subletter can purchase an annual renters insurance policy and then cancel it once they move out.
For the original leaseholder, it’s recommended that you have liability coverage at bare minimum, to protect your name in case an injury takes place at your rental while you’re away.