Policy Offsets/Questions

1

Hello all.Could really use some guidance with our situation.I recieve ltd and cppd.We contacted my insurer about renting out part of my home which they said was permitted as per the policy.When asked for a letter verifying this we were told no..its in the policy.

In the policy under offsets,there is no mention of rental income.Only thing similar is “any monthly Earnings or payments from Employer” Is passive rental income considered “Earnings”?

We contacted cpp and were advised they do allow rental income and it would not have any affect on the monthly cppd payments.

I will need to spend money to finish this part of the home but are very hesitant to do so as there isnt anything mentioning rental in the policy,and the insurer doesnt want to send us anything in writing.

Can anyone give us some advice on what to do?Thank you so much for any help:)

2

In the context of most LTD policies:

  1. If rental income isn’t listed as an offset then it can’t legally be used as an offset.
  2. Unless otherwise defined in the policy rental income is passive income, and passive income is not earnings.
  3. Unless otherwise defined in the policy earnings involves doing actual work.

Based on what you have written your policy is silent on rental income therefore it can’t be used as an offset. With regards to getting a letter from them, you can achieve the same thing by just sending them an email stating the you had a conversation with your claims manager that rental income can not be used as offset.

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3

I would agree with Buckets’ suggested approach. I’ve been renting out my basement suite for years. Neither CPP nor my LTD insurer has ever asked for more details when I included it in my sources of income disclosure. LTD insurance is for the loss of income from work, and unless you manage so many properties that it becomes a job it won’t be an issue.

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4

Thank you both for helping me with this much appreciated:)

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5

@PaulG, you may want to check out this article David wrote in the past. All the best.

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6

Relating to post title, does anyone know if an honorarium considered passive income?

Ty

7

I have never looked into it as my LTD policy also prohibits volunteering…

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8

I asked my insurance company about volunteering.

It was only for a small amount of time and I didn’t end up doing it.

They said it was ok if I did it.

I would think the honorarium depends more on the amount of time you volunteer.

I would ask the insurance company or maybe ignorance is bliss (I don’t think that is a good legal defense though).

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