When I bought my condo in 2009, my accountant told me that if my partner was going to move in, I should get a cohabitation agreement that would protect my ownership of the property. Nothing was said, however, about needing more home insurance coverage when a household increases in size.
While you might already have a home or tenant insurance policy, that may not be adequate coverage if your partner moves in with you. And you thought you only had to worry about sharing closet space.
Defining the term “partner”
When it comes to home insurance, we need to start by defining what the word “partner” means. That’s because insurance coverage for your partner depends on your location and your insurance provider’s definition of “partner” or “spouse.”
While the Government of Canada defines a “spouse” as the person you’re legally married to, some provinces have different definitions. Ontario, for example, also defines a spouse as someone you’re legally married to but also as someone you’ve lived with for three years, a common-law relationship.
Then it depends on how your insurance provider defines spouse and partner. If you’re legally married, most home and tenant insurance policies will automatically cover your partner when they move in.
If you’re not legally married, you’ll have to check with your insurance provider. If your insurance doesn’t cover your partner, when they move in, they may want to consider purchasing some kind of coverage for their items in case of theft or damage. Here are some other options.
Add your partner to your policy as an additional named insured
One option can be adding them to your policy as “additional named insured.” They will be protected by the policy but you remain the primary policyholder. They also aren’t responsible for the premium — you still have to pay that. Plus, any claims they make will be reflected on your insurance policy.
Adding them to your policy isn’t free, either. You can expect your premium to increase depending on how much coverage is involved because now there are two people with more contents that might need to be insured. Both of you may have valuable electronics or your partner may have a rare book collection. (This is where you might want to ask your partner to cover the difference.)
Suggest your partner get their own tenant or home insurance policy
Another option is for your soon-to-be-moving-in partner to purchase their own home or tenant insurance policy. That way, they’re also protected in case of theft or damage, but they’ll pay their own premium and there won’t be any claims made against your policy, which will affect the price you pay and your insurance history. Tenant insurance is usually pretty affordable and will cover both contents and liability.
What about adding them as a co-owner on the policy?
Unless you’re married or are planning for a long-term relationship, it’s not a good idea to add your partner as a co-owner of the policy. If a claim was made on your policy, both you and your partner would receive an equal payout, a 50/50 split, even if the damage was unequal.
It’s a good idea to tell your insurance company that you’re going to share your home with your partner. That way they can tell you if your policy will cover them. It also prevents unpleasant surprises when you try to make a claim and find out that your partner and their possessions are not covered.
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