Split Commercial / Residential Property Insured as Residential?

[Dane Fotus]

Hello,

I have recently acquired a split commercial / residential property in Ontario, Canada. The first floor is commercial space, and the top two floors are my home. The property is zoned General Commercial. My current insurance is a commercial policy, even though I am not yet running a business out of the commercial space. Nor is the commercial space vacant, as I walk through the space or work in the space every day I am home. I have been told by multiple brokers that it must be insured as a commercial property, although today I have just received a quote to insure it as a residence. This quote originated from the broker providing my current policy who is fully aware of the property description. I am a bit skeptical because I initially requested this type of coverage in the first place, and only after I have started a second round of shopping around have they come back with this. Are there reasons that a proposed residential policy for my property would not be valid? Note that because I purchased the property outright, I have no lender requirements for specific coverages.

Thank you,
Dane

 

[adjusterjack]

This bothers me:

I am not yet running a business out of the commercial space.

Does that mean you intend to run a business out of that space in the future? If yes, depending on the type of business, you might end up going back to a commercial policy anyway.

Are there reasons that a proposed residential policy for my property would not be valid?

As long as the risk was properly presented to the underwriter and approved, there shouldn't be any issues.

I suggest you visit your broker and insist on a copy of the application that he presented to his underwriter to make sure nothing was omitted about the building.

 

[Dane Fotus]

Jack,

Thank you for the quick reply!

Does that mean you intend to run a business out of that space in the future? If yes, depending on the type of business, you might end up going back to a commercial policy anyway.

I intend to run a mixed use shop out of here eventually but am at least a year or maybe two away.

As long as the risk was properly presented to the underwriter and approved, there shouldn't be any issues.

I suggest you visit your broker and insist on a copy of the application that he presented to his underwriter to make sure nothing was omitted about the building.

Great, I will do exactly that. Thank you for your advice.

Regards,
Dane