Updated on August 12, 2026 by Arshi Hossain | Originally written May 2, 2025

If you're subletting your rental, you still need tenant insurance. Depending on your policy, you may need to update it before the subtenant moves in.

Your policy covers your personal belongings and liability, not your subtenant's household items.  

If your subtenant's laptop is stolen, their belongings are damaged, or they accidentally injure a guest, your policy won't cover their losses. It also won't cover their Additional Living Expenses (ALE) if the unit becomes uninhabitable. Subtenants need their own insurance coverage. 

What is subletting and how does it work?

Subletting is when a tenant rents out all or part of their rented space to another person, called a subtenant, while still maintaining responsibility for the original lease. 

For example, if you signed a one-year lease but need to leave town for a few months, you can sublet your apartment to someone who will occupy it during your absence. But your name remains on the lease.

You remain on the hook for paying rent and maintenance of the unit, even while someone else is living there.

Subletting is permitted in most provinces but usually requires written approval from your landlord. Each province has its own rules about landlord consent, so it’s important to check local regulations.  

Sublessors must also draft a clear sublease agreement. The agreement should outline responsibilities, such as the subtenant’s obligation to pay rent and maintain the unit, while also specifying any rules or conditions to avoid misunderstandings.

Learn more: Home exchanges and timeshares: How do they work?

Does my tenant insurance allow subletting?  

No, tenant insurance doesn't automatically cover subletting. Most standard tenant insurance policies are written for the named policyholder living in the unit. So, when someone else moves in, even temporarily, it can change how your insurer assesses your risk.  

In cases where you are allowed, “most insurers will issue an endorsement acknowledging the subletting arrangement rather than rewriting the whole policy,” says David Mayer, Rates.ca director of insurance and underwriting.  

Before handing over any keys, check your policy wording for terms like ’vacancy’, ‘subletting’, or ’change in occupancy’. If it's unclear, call your insurer directly and ask two things:  

1. Whether subletting is permitted under your current policy
2. Whether you need to make any changes to your policy before the subtenant moves into your rental

Mayer notes some insurers may adjust your premium or add conditions: expect a modest premium increase to reflect added liability risk of another person occupying the space.

“In some cases, the insurer may add specific conditions—like limiting coverage to a defined subletting period—or exclude certain subtenant-caused losses entirely. It is key to disclose early: surprises at claims time are far more costly than any premium bump.”

What happens if you don't notify your insurer when you sublet your rented home?

If you don't notify your provider before subletting, you could find yourself with a denied claim if something goes wrong, involving either property damage or liability. Some insurers treat subletting as a material change to your risk profile.

Confirm any changes to your insurance policy in writing, and keep that documentation alongside your sublease agreement.

Related: Home exchanges and timeshares: How do they work? 

Does a subtenant need their own policy?

Yes, a subtenant does require their own insurance coverage. According to Mayer, a subtenant cannot simply be added to the primary tenant's policy, they need their own.  

“The primary tenant's renters insurance covers their belongings and liability, not someone else living in the space under a separate arrangement. A subtenant has distinct insurable interest and their own liability exposure, so a standalone policy is the right call,” he says.  

If the unit becomes uninhabitable, your ALE coverage won't apply to your subtenants.

As a sublessor named on the lease, your landlord would hold you responsible if your subtenant causes any damage in the unit.  

Read more: Does renters' insurance covers damage to the landlord's property? 

Is landlord insurance required when subletting?

For primary tenants who sublet their rental, landlord insurance isn’t required. Landlord insurance is typically designed to protect property owners, not tenants, offering coverage for the building itself and associated liabilities. As a tenant, you don’t own the property. Hence landlord insurance doesn’t apply directly to you.  

Related: Why absentee landlord insurance helps manage rental properties long distance 

What to consider when subletting an Airbnb you don’t own for short-term stays

Subletting an Airbnb you don’t own requires landlord approval and must follow local rental laws, which vary by city and province. This practice of renting a property long term and subletting it short-term to earn a profit is known as Airbnb arbitrage. Some cities like Vancouver require hosts to live on the property or cap the number of rentable nights per year.  

What is the insurance exposure with short-term sublets?

Insurance exposure can be significant when subletting an Airbnb. “Most standard renters’ policies contain a commercial activity exclusion, meaning if you're earning income from your unit, coverage can be voided entirely for losses during that period,” says Mayer.  

You’ll need a specialized short-term rental policy to cover for any damages that short-term sublets might cause.

Engaging in illegal subletting is not only against the rules but could also leave you financially vulnerable. “If a guest causes a fire, floods the bathroom, or gets injured, the tenant could be on the hook personally for property damage and liability with no insurer to backstop them,” Mayer says.  

When does each type of rental insurance apply?  

Landlord, tenant, and subtenant insurance cover different risks. A landlord's or tenant's policy doesn't automatically protect a subtenant's belongings or liability.

A handful of carriers in Ontario are known to offer coverage for short-term rentals, but availability depends heavily on the situation (owner vs. tenant), according to Mayer. “The right advice here is to speak with your broker or insurance company to discuss the specific situation.”

What are questions tenants almost never think to ask, but should?

"Does my policy cover me if someone is paying to be in my home?"

Insurance expert Mayer says most tenants assume their existing coverage travels with them through any living arrangement. “It doesn't.” The moment money changes hands for occupancy, the nature of the risk changes in the insurer's eyes.

Mayer’s list of specific things to ask your broker:

1. Commercial activity exclusion: Does subletting trigger it, even partially?
2. Vacancy or change-of-occupancy clauses: Does the policy require you to be the primary occupant at all times?
3. Liability coverage scope: Are you protected if the subtenant injures a third party and you get named in the lawsuit?
4. Contents coverage: Are your belongings still covered if damaged by a subtenant?
5. Short-term rental endorsement: Does your insurer offer one, and what does it actually cover vs. exclude?
6. Notice requirements: How quickly must you inform your insurer of a subletting arrangement to keep your own rental insurance coverage valid?

The key to a worry-free experience is ensuring you're properly protected, no matter where you call home or how long you stay.

Read next: How much home insurance coverage do you actually need?