A study conducted by a Vancouver-based insurance company shows that homeowners in British Columbia have the highest percentage of secondary suites west of Ontario, with Vancouver owners leading the pack.

"B.C. is the highest across all of the provinces at 25 per cent," said Daniel Mirkovic, president of Square One Insurance.

"In Vancouver, it can creep up as high as 40 percent of people who have a detached home have a basement suite or some type of suite that they are renting to others."

The study conducted by Square One Insurance examined 4,000 of its home insurance policy holders in Ontario, Manitoba, Saskatchewan, Alberta and B.C.

On average, 14 per cent of the company's policy holders had secondary suites, compared with 43 per cent in Vancouver.

"Probably the number one reason is to help them fund their mortgage with the high cost of real estate," said Mirkovic.

"Other people simply have unneeded space and see this as a good way to make extra income as well."

This may not come as a surprise to Vancouverites, who are living in one of the hottest real estate markets in Canada.

The study found that only five per cent of its policy holders in the Prairies rent out a portion of their homes to non-family members.

The company also said that those numbers may be lower than the actual percentage because people may be reluctant to disclose illegal suites that don't have a permit from the city.

It also encourages homeowners with secondary suites to ensure they have the proper policy in place so their property is adequately covered.

Secondary suites encouraged in Vancouver

The City of Vancouver has long advocated for secondary suites as a strategy to increase density and provide more rental housing.

Although they were originally seen as a nuisance and discouraged, rules in Vancouver around secondary suites began to soften in the 80s. In 2004, all single-family areas were rezoned to allow secondary suites.

In Calgary, councillors recently rejected a plan to make it easier for homeowners to have secondary suites in a handful of Calgary wards.

A patchwork of policies also exists across the country for laneway homes, an increasingly popular type of secondary suite in Vancouver.

Laneway houses are not universally embraced by civic governments and neighbourhoods across Canada due to fears of increased density, lack of parking, and other concerns.