Questions about illegal/secondary suites

I've never rented a unit in a house before, but viewed one today that was on the top floor of a house and the ground floor unit was also being rented separately with a back entrance - all using the same single address. My first concern was to do with rental agreements, but some digging tells me that the RTA applies no matter how the landlord has decided to rent their units out. So, are both suites technically 'illegal'? Or just the ground floor suite that uses a back entrance?

I was also wondering about tenant's insurance. Has anyone had any trouble obtaining insurance for 'illegal' suites? I called my insurance company to check but can't get an answer until tomorrow.

Any other pitfalls of these suites? It looks like we all share one address, which is a little weird I suppose since I guess we would receive all their mail and have the exact same address for taxes, drivers licences, etc.